IFC, Sixth Sense Venture Advisors LLP, will invest Rs. 155 crores and Rs. 50 crores respectively in Parag Milk Foods
NEW DELHI, Apr 5 (The CONNECT) – Dairy-FMCG major Parag Milk Foods Limited announced its plans to raise a total of Rs. 316 crores by way of preferential issue of equity shares, Foreign Currency Convertible Bonds (FCCB) and the issue of convertible warrants. This is subject to Shareholder’s approval in ensuing Extra-ordinary General Meeting (EGM) scheduled on April 26 as well as regulatory approvals.
International Finance Corporation (IFC) is proposing an investment of up to Rs. 155 crores through subscription to preferential issue of equity shares and subscription of FCCBs in addition to proposed subscription to NCDs of Rs.150 crores committed in December. The investment includes a preferential allotment of 67,56,757 equity shares of face value Rs. 10 each at a price of Rs. 111 (including a premium of Rs. 101 per Equity Share) for a total consideration of Rs. 75 crores. Additionally, as part of the proposed investment, IFC would be offered to subscribe Foreign Currency Convertible Bonds (FCCBs) aggregating up to US$ 11 million by private placement to be converted at, subject to applicable laws, a conversion price of Rs. 145 per equity share with a 5 year maturity to redemption.
Sixth Sense Venture Advisors LLP, which is India’s first domestic, consumer-centric venture fund, also showed confidence in the company and has proposed an investment of Rs.50 crores by way of preferential allotment of 45,04,505 equity shares of face value Rs. 10 each at a price of Rs. 111 each (including a premium of Rs. 101 per Equity Share).
The promoters will further invest Rs. 111 crores that includes preferential allotment of 50,00,000 convertible share warrants in the name of Mr. Devendra Prakash Shah along with 50,00,000 to Mrs. Netra Pritam Shah, convertible into equity shares with a face value of Rs. 10 each fully paid up, on a preferential basis, at a price of Rs. 111 (including premium of Rs. 101) per share warrant. With this, the promoter holding in the company would be maintained at 46%.
Parag Milk Foods Chairman Devendra Shah said the funds raised through the FCCBs will be utilised for meeting the capex requirements over the next two years. The proceeds of preferential shares and warrants would be help reduce short-term debt limits and enhance working capital for future growth. “This would provide enough firepower to bolster the balance sheet and propel the company for future growth,” said.
Nikhil Vora, Founder & CEO of Sixth Sense Ventures said, “Parag fits perfectly well into the Sixth Sense thesis of betting on first generation founders, pioneering products for the new age consumer within the US$100bn+ diary segment. We believe the Indian branded dairy space will get deeper with consumers migrating from the unorganized to the organized space, across product segments. Parag with its strategically focused branded dairy products is best positioned to reap the benefits of the changing consumer preferences.”
Parag Milk Foods Limited, established in 1992, is the largest private dairy FMCG Company with a pan-India presence. We have our own manufacturing facilities with in-house technology which are strategically located at Manchar in Maharashtra, Palamaner in Andhra Pradesh, and Sonipat in Haryana.
Its dairy farm, Bhagyalaxmi Dairy Farm Private Limited house more than 2,500 Holstein Friesian cows, with a mechanized milking process. Under brand Gowardhan, Parag offers traditional products like Ghee, Dahi, Paneer etc., while under brand name “Go” we offer products like cheese, UHT milk, buttermilk, lassi, yoghurt etc.
Pride of Cows, the flagship brand of Parag Milk Foods was introduced with a proposition of Farm to Home concept targeted towards customers seeking premium quality cow milk. The Company also forayed into dairy based beverages with the launch of “Topp Up” and “Slurp” – a mango drink with a dash of milk. Recently the Company has also ventured into B2C segment for Whey Protein with the brand Avvatar – India’s 1st 100% vegetarian whey protein, first of its kind manufactured in India.
