Parag IPO details – Worth investing ?

Another dairy IPO of the year is coming after the successful IPO of Prabhat dairy. This time it’s a dairy-based branded food producer- Parag Milk Foods Ltd. The company manufacturing a diverse range of products including cheese, ghee (clarified butter), fresh milk, whey proteins, paneer, curd, yoghurt, milk powders and dairy based PARAG Foods IPO detatilsbeverages. The company aims to raise Rs. 750-764 crore by offering shares at Rs. 220-227 per equity share. The company announces a discount of Rs. 12 on the final issue price of retail bidders and eligible employees.

About Company:-

Parag Milk Foods Ltd incorporated on December 29, 1992 . They are one of the leading manufacturers and marketers of dairy-based branded foods in India. It’s a Pune based firm. They started with collection and distribution of milk and later developed into a dairy-based branded consumer products company. Their aggregate milk processing capacity is 2 million litres per day and their cheese plant has the largest production capacity in India, The Company make all the products from cow’s milk.

Their brands and its products are as follows:-

  • Gowardhan:-The products under this brand are for house-hold consumption and to be used as cooking ingredients like fresh milk, Ghee, Paneer, Butter, Milk ,Whey proteins and whey permeate powders, Gulabjamun mix, Shrikhand.
  • Go: – The products under this brand are for children and the youth generation, primarily for direct consumption. Its products are mainly Cheese made like processed cheese blocks, pizza cheese, cheese spreads etc., UHT milk: Go Milk, Go Slim Milk and Go Supremo Milk , Fresh milk: Go Kidz , Curd , Fruit yoghurts in six flavours , Fresh cream, Beverages such as lassi, buttermilk in two flavours, and badam milk
  • Pride of Cows: – This brand follow Farm-to-home concept of milk, in which milk is directly delivered from the farm to a consumer‘s door-step, through a subscription model. Basically this brand is for household consumers seeking for premium quality cow‘s milk.
  • Topp Up:- The products under this brand are for youth generation and travellers as a source of instant nourishment. This brand having products of flavoured milk in six flavours.

Their manufacturing facilities are located at Manchar in the Pune district of Maharashtra and Palamaner in the Chittoor district of Andhra Pradesh. These places have a high population of dairy cows, with milk processing capacities of 1.2 million litres per day and 0.8 million litres per day. They procure milk from milk farmers and through chilling centres and bulk coolers. Their supply chain network includes  buying from 29 districts across Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu, through over 3,400 village level milk collection centres.

The Company is promoted by Mr. Devendra Shah, Mr. Pritam Shah and Mr. Parag Shah, each of whom has over 20 years of industry experience. They have well established relationships with farmers in the vicinity of their facilities, distributors and institutional customers.

Qualitative Factors:-

They believe that the following are their competitive strengths:-

  • Well Established Brands Targeting a Range of Consumer Groups;
  • Integrated Business Model
  • Diversified Product Portfolio and Customer Base
  • Growing Pan-India Distribution Network
  • Established Track Record of Growth and Financial Performance and
  • Experienced Senior Management

Financials:-

The Company’s financial status shows the condition of company clearly. The firm being in loss only in 2011 but after that they are in profit always. The profit percentage is up and down but they always have profit which is good about them.

Parag IPO Financial Details

The Company’s total revenues were Rs.12,311.88 million, Rs 14,405.19 million and Rs.10,895.00 million and their profit after tax was Rs. 319.23 million, Rs.259.66 million and Rs.159.68 million for the nine months ended December 31, 2015 and the financial years 2015 and 2014, respectively. Their revenue from the sale of manufactured goods accounted for Rs.10,928.95 million,Rs.13,289.78 million and Rs. 9,593.24 million, or 88.8%, 92.3% and 88.1% of our total revenues for the nine months ended December 31, 2015 and the financial years 2015 and 2014, respectively.

Valuation and Competition

Based on the earning, Parah P/E multiple is close to 44 times at higher price band. Compared to the competitors like Hatsun Agro products which trade at around 57 P/E. The price doesn’t seem to be very expensive when compared to the competition.

IPO details for applying the IPO

Parag IPO details

Important date for the IPO

Parag IPO important dates

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Disclaimer: We are not SEBI registered advisor and this article is not an investment advice. We are not authorized to give investment advice nor do we provide it on this website. In case you are interested in investing, we would advise you to contact your advisor for the same. We cannot be held liable for any loss arising due to investment made as per this article.

 

 

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