Milky Mist

Milky Mist

By Geetanjali Kedia
about 5 days ago

IPO Size: Rs. 1,553 cr

  • Fresh Issue of Rs. 1,428 cr (13% dilution) for (i) Rs. 497 cr loan repayment (ii) Rs. 469 cr capex (iii) Rs. 155 cr for deploying cooler and freezers
  • Offer for Sale (OFS) of Rs. 125 cr by promoter (93% to shrink to 80%)

Price band: Rs. 133-140 per share

  • Company raised Rs. 357 cr through pre-IPO placement to Temasek in April 2026 at Rs. 140 per share

M cap: Rs. 10,778 cr (IPO is 14% of m cap)

IPO Date: Tue 11th Aug to Thu 13th Aug 2026, Listing Tue 18th Aug 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

 

Erode, Tamil Nadu based Dairy Company

Milky Mist Dairy is a 28-year-old dairy products brand, with 70% of Rs. 3,100 cr revenue generated from South India. It is India’s largest private packaged paneer brand in the organized market, with 19% market share, and the largest private packaged cheese brand in South India with 12% market share.

 

Revenue Mix

Milky Mist’s product basket comprises ‘value added’ dairy products such as paneer (30% of revenue), cheese (16%), curd (13%), ghee (10%), ice-cream (7%), flavoured yoghurt, butter, milk powder etc. which helps clock gross margin of 33%, higher than 26-30% of peers Hatsun, Heritage, Dodla. However, Milky Mist’s net margin of 3.3% (adjusted for MAT) is in-line with peers 3.3% to 5%.    

In terms of channel mix, about 40% revenue comes from general trade, 23% modern trade and 14% from e-commerce.

 

High Growth Financials

In past 4 fiscals, revenue grew at 31% CAGR to Rs. 3,138 cr in FY26, from Rs. 1,394 cr in FY23. With PAT of Rs. 127 cr, FY26 net margin was reported at 4%, partly elevated due to Rs. 25 cr MAT credit of earlier years, as MAT carried forward is not permitted beyond 31.3.26. Excluding this, adjusted net margin stands at 3.3% for FY26.

Strengthening product mix and operating leverage can expand net margin going forward, although dairy business seldom clocks margins, as high as packaged food and beverage and FMCG businesses, due to relatively lower gross margin.

 

Debt-funded Growth

Company’s growth has been largely debt-funded. Having undertaken Rs. 1,738 cr capex in last 4 fiscals, gross debt stood at Rs. 1,672 cr, as of 31.3.26. On a net worth of Rs. 463 cr, the net debt to equity ratio is seen high at 3.6:1, is quite large.

However, post IPO, this will shrink to 0.5:1 with net debt to EBITDA also halving to 1.6:1 (still high), as pre-IPO funds and fresh issue proceeds part-retire debt.   

 

Fully Priced Issue

M cap of Rs. 10,778 cr and Enterprise Value of Rs.11,658 cr imply a historic PE multiple of 71x, on FY26 EPS of Rs. 1.97. Assuming 33% growth for FY27E, lower interest outgo, operating leverage, but no MAT credit, FY27E estimated EPS is seen at Rs. 2.5, implying a current year PE multiple of 56x.

Tamil Nadu-headquartered and largest private sector dairy peer Hatsun Agro is ruling at a m cap of Rs. 21,000 cr for Rs. 350 cr PAT on Rs. 10,000 cr topline, implying a historic PE of 60x and FY27E PE of ~52x.  

Milky Mist’s IPO valuation ask is half of Hatsun for approximately one-third the bottomline, making it fully priced.