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    Dodla Dairy IPO fully subscribed on first day of issue

    Synopsis

    At the upper end of this price band, the company is demanding a post-issue annualised FY21 PE of 16.4 times.

    IPOETMarkets.com
    On Tuesday, the dairy company had raised Rs 156 crore from anchor investors at Rs 428 apiece.
    NEW DELHI: The Rs 520 crore Dodla Dairy IPO saw strong response from investors as the issue was fully subscribed on the first day of the bidding process on Wednesday.

    The IPO attracted bids for 1,19,38,955 shares by 5:00 pm, which was 1.4 times the issue size of 85,07,569 shares, according to data from NSE. The IPO is being sold in the Rs 421-428 price band.

    At the upper end of this price band, the company is demanding a post-issue annualised FY21 PE of 16.4 times. While the asking valuations are at par with Heritage Food, they are lower than Parag Milk Foods' 32.7 times and Hatsun Agro's 81 times FY21 earnings. Except for Hatsun Agro, dairy stocks are trading quite below their record high levels.

    The South India-based dairy company had on February 2 this year executed a private placement, allocating 26.5 lakh shares to International Finance Corporation at Rs 377 apiece. On June 11, a few members of promoters transferred 9.7 lakh shares to SBI Mutual Fund at Rs 411.50, Choice Broking said.

    On Tuesday, the dairy company had raised Rs 156 crore from anchor investors at Rs 428 apiece.
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    SUBMIT

    Dodla Dairy is the third largest player in terms of milk procurement, with an average procurement of 1.03 million litres of raw milk per day (MLPD) as of March 31, 2021. The company’s processing operations are spread across 13 processing plants located in Andhra Pradesh, Telangana, Karnataka and Tamil Nadu, with an aggregate installed capacity of 1.70 MLPD. It also has two skimmed milk powder (SMP) plants in Nellore and Vedasandur, which have an aggregate installed capacity of 15,000 and 10,000 kgs per day, respectively.

    Over FY18-20, Dodla's revenues rose 16 per cent and Ebitda 12 per cent annually. PAT fell 6 per cent annually.

    Analysts said maintaining such high margins is difficult as they was achieved on cost-cutting measures. The management too has guided towards normalisation of margins.



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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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