Hyderabad-based Dodla Dairy Ltd, is probably to get debt investment of up to Rs 106 crore ($15 million) from International Finance Corporation, the private-sector investment arm of the World Bank.
As per the disclosure by the company, Dodla Dairy is planning ot use the proceeds to expand and upgrade its existing manufacturing infrastructure by purchasing new equipment for select processing plants.
Dodla Dairy, which counts US private equity firm TPG Growth as its backer, had received approval from the Securities and Exchange Board of India in October last year to float its initial public offering.
The business model of Dodla dairy is, it procures, processes and markets milk and value-added dairy products such as curd, ghee, butter, flavoured milk and ice cream. It gets about two-thirds of its revenue from milk and the remaining from dairy products.
The firm is getting promoted by Dodla Sesha Reddy and Dodla Sunil Reddy and it operates under the brand names ‘Dodla Dairy’ and ‘Dairy Top’. It claims to be the second-largest by market share and the third-biggest milk procurer among the private players in India, with an average procurement of 1 million litres of raw milk per day. The company has factories in Andhra Pradesh, Telangana, Karnataka and Tamil Nadu and also runs operations in Uganda and Kenya.
Besides debt investments, the World Bank’s investment arm also makes direct private equity-style bets in India across sectors. It is also an investor in private equity and venture capital firms focused on India.
IFC had already invested in India’s dairy sector. It invested up to $17 million (Rs 92.7 crore) in Pune-based Parag Milk Foods Pvt. Ltd in 2013.