Details of the Parag Milk Foods IPO

  “Parag Milk Foods IPO Review

Initial Public Offer (IPO) of Parag Milk Foods is hitting the primary market this May with price band between Rs.220 to Rs.227. Actual dates of the Parag Milk Foods IPO are 04 May 2016 (open) and 11 May 2016 (Close). Lets understand the details of this IPO in this review. 

Know your allotment status : Parag Milk Foods IPO Allotment Status

parag-milk-foods-ipo-price-band

  Parag Milk Foods History

The company commenced business as Parag Milk & Milk Products Private Limited on December 29, 1992 with the collection and distribution of milk and have now developed into a dairy-based branded consumer products company with an integrated business model, manufacturing a diverse range of products including cheese, ghee (clarified butter), fresh milk, whey proteins, paneer, curd, yoghurt, milk powders and dairy based beverages targeting a wide range of consumer groups through several brands.

A significant portion of its product range includes long shelf-life is food and beverage products that enable it to sell its products to retail and institutional customers across India.  Its aggregate milk processing capacity is 2 million liters per day and its cheese plant has the largest production capacity in India, with a raw cheese production capacity of 40 MT per day. “Gowardhan” and “Go” -its flagship brands, are among the leading ghee, cheese and other value added product brands in India.

  Parag Milk Foods Financials

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Source : Parag Milk Foods Draft Red Herring Prospectus (DRHP) with SEBI

Revenue of the company has seen good growth for the last five years. The profit also seen good growth except in 2014. The main reason being increase in the inventories. But the company is able to sell the finished goods in 2015 and it shows the strategy of management has worked.

  To Invest or not to Invest in Parag Milk Foods IPO?

Positives :


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  • Reasonably priced valuation of 46x in comparison to Nestle 48x
  • Good revenue and profit growth for last five years

Negatives : 

  • Even though  profit is growing, the cash flow is negative and it is an alarm bell for seasoned investor
  • Its manufacturing and procurement facilities are concentrated in few areas
  • Its subsidiary, Bhagyalaxmi Diary is making loss

  Parag Milk Foods Share Price 

The Parag Milk Foods IPO Share Price Band is fixed between Rs.220 to Rs.227 per equity share

  Parag Milk Foods IPO Issue Dates

The Parag Milk Foods IPO is set be launched on 04 May 2016 and closes on 11 May 2016.

  Parag Milk Foods Share listing Date on Stock Exchanges

Parag Milk Foods shares will be listed on NSE and BSE on 19th May 2016. You may get the allotted shares in your demat account by 18 May 2016.

  Parag Milk Foods IPO Other Details

  • Issue Type: 100% Book Building
  • Issue Size: Offer for sale of up to 19,850,000 Equity Shares of Rs10
  • Face Value Per Share: Rs.10
  • Issue Price Band: Rs.420– Rs.446
  • Market Lot : 65 shares
  • Minimum Order Quantity : 65  Shares
  • Listing on Exchanges : BSE and NSE
  • Parag Milk Foods Promoters :Devendra Shah, Pritam Shah and Parag Shah
  • Parag Milk Foods IPO Investment Bankers: JM Financial, Kotak Mahindra Capital Company, Motilal Oswal Investments Advisors and IDFC Securities Limited 

  Objects of Parag Milk Foods IPO Issue

  • To meet the capital expenditure requirements for expansion and modernization of existing manufacturing facilities at Manchar and Palamaner.
  • Partial repayment of the Working Capital Consortium Loan
  • Investment in Subsidiary for financing the capital expenditure
  • General corporate purposes.

  Parag Milk Foods IPO Other Information

Parag Milk Foods Contact Information :
Flat No 1, Plot No. 19,
Nav Rajasthan Society, S.B. Road.
Shivaji Nagar, Pune 411016
Website : http://www.paragmilkfoods.com/
Email:  cs@paragmilkfoods.com
Phone: + 91-20-4300 5555

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Disclaimer : No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial adviser prior to making any actual investment decisions, based on information published here in this IPO. The author cannot be held liable for any loss arising by following this article.

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