Tamil Nadu-based Milky Mist Dairy Food launches its ₹1,553-crore IPO, focusing on value-added products and expansion, as investors weigh growth prospects against valuation risks.
Milky Mist Dairy Food opened its initial public offering on Monday, setting a price band of ₹133 to ₹140 a share for the Tamil Nadu-based dairy group’s ₹1,553-crore issue, which closes on Thursday. Investors can apply for a minimum of 107 shares and in multiples thereafter, while the company has reserved up to 50% of the issue for qualified institutional buyers, at least 15% for non-institutional bidders and at least 35% for retail investors. Eligible employees will get a discount of ₹13 a share under the employee quota.
The offer combines a fresh issue of up to ₹1,428 crore with an offer for sale of up to ₹1,250 crore, including stock worth ₹75 crore from Sathishkumar T and ₹50 crore from Anitha S. Milky Mist has already raised roughly ₹465 crore from anchor investors, with participation from Zulia Investments Pte, the Temasek-linked investor, and the International Finance Corporation, alongside domestic mutual funds and other large institutions. The company also completed a pre-IPO placement of ₹357 crore before the public issue opened.
According to the prospectus details highlighted by The Hindu BusinessLine, the company plans to use ₹496.86 crore of the fresh proceeds to reduce borrowings, ₹469.24 crore to expand and upgrade its Perundurai plant in Erode district and ₹155.31 crore to add visi-coolers, ice-cream freezers and chocolate coolers, with the rest earmarked for general corporate purposes. Milky Mist has also received approvals for listing on both BSE and the National Stock Exchange, with NSE as the primary exchange, and the issue is being managed by JM Financial, Axis Capital and IIFL Capital Services.
Brokerages have backed the deal, though not without caution on valuation. SBI Securities said the company’s focus on value-added dairy products, rather than plain liquid milk, supports stronger margins and quicker growth, and argued that debt reduction should lower interest costs and aid earnings. Anand Rathi took a similar long-term view, but said the offer looks fully priced at the top end of the range. Both firms pointed to Milky Mist’s strong position in packaged dairy and premium products as the key reason for interest in the stock.
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