Milky Mist Dairy Food is in discussion with private equity funds such as ChrysCapital, Kedaara, Multiples, True North, TA and Temasek to raise USD 100-120 million in what would be its first institutional funding – as reported in a leading daily.

The final binding bids are expected to be in towards the end of the month or early next month. The dairy and fresh food company has appointed Chennai-based investment bank Veda Corporate Advisors to help it with the funding process.

Read: June 2022 Issue of Food InfoTech Magazine.

Milky Mist was set up by T. Sathish Kumar in 1992 to sell milk and has since expanded into value-added products such as milkshakes, flavoured yogurt, butter, cheese variants, and UHT products.

The company has a 55-acre plant in Perundurai, Tamil Nadu, and supplies through a retail network of more than 1,50,000 outlets. It has tied up with 60,000 dairy farmers to process 1.5 million litres of milk each day. It generates an annual revenue of Rs. 1,300-1,400 crore.

The company expects a valuation multiple akin to FMCG companies. The company is profitable, and the deal is gaining a lot of traction from consumer-focused funds. Milky Mist currently has a strong presence in southern India and, with its plans to become a Pan-India brand, it needs capital to scale.

It will look at raising USD 100-150 million given the inbound interest and is likely to sell a significant minority stake in an entirely primary round.

Milky Mist had previously raised debt from Anicut Capital, a venture debt fund. The organised dairy and fresh food sectors are gaining momentum with investors.

Also Read: Cascades Launches an Innovative Isothermal Packaging Technology.

The dairy sector is set for the second straight fiscal year of double-digit revenue growth at 11–12%, a notch below last fiscal’s 13% growth, according to Crisil Ratings. The growth is driven by healthy demand for value-added products (28% of overall sales), even as sales of liquid milk stay steady and the full-year benefit of retail price hikes implemented last fiscal year is realized. Within value-added products, a strong recovery is expected in the demand for cold VAP such as ice-cream, curd, and flavoured milk.


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