Milky Mist Dairy Food Limited, a leading packaged food company from Tamil Nadu, has taken a significant step forward by filing its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The company plans to raise up to Rs 2,035 crore through an initial public offering (IPO) as it looks to expand its footprint in India’s fast-growing value-added dairy segment.

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IPO Breakdown: Fresh Issue and Promoter Sale

The IPO comprises two key components:

A fresh issue of Rs 1,785 crore aimed at scaling up production capabilities, reducing debt, and strengthening distribution.
An offer for sale (OFS) of Rs 250 crore by promoters Sathishkumar T and Anitha S, allowing partial exit while maintaining governance control.

This well-balanced capital raise reflects Milky Mist’s strategic priorities for growth and financial health.

Milky Mist’s Unique Positioning in India’s Dairy Sector

Founded in Erode, Tamil Nadu, Milky Mist focuses on premium value-added dairy products (VADPs) such as paneer, cheese, curd, yogurt, butter, ghee, and ice cream.

Unlike many traditional dairy firms, Milky Mist does not deal in liquid milk, enabling healthier margins and positioning itself more like an FMCG brand. This helps the company tap into evolving consumer preferences for branded, convenient, and premium dairy products.

Robust Financial Performance Highlights

Milky Mist has shown impressive growth momentum over recent years:

Revenue climbed from Rs 1,394 crore in FY23 to Rs 2,349 crore in FY25, representing nearly 30% CAGR.
EBITDA in FY25 touched Rs 310 crore, delivering a strong margin of 13.2%, among the best in the dairy sector.
Net profit surged to Rs 46 crore in FY25, up from Rs 19 crore in the previous year.

Approximately 75% of revenue comes from staple dairy items like paneer, curd, yogurt, ghee, and butter, underscoring its deep penetration in daily Indian diets.

Planned Use of IPO Proceeds: Expansion and Debt Reduction

Milky Mist intends to use the fresh funds primarily to repay or prepay existing borrowings, invest significantly in the expansion and modernization of its Perundurai manufacturing plant, and to enhance its retail presence by deploying visi coolers, ice cream freezers, and chocolate coolers across markets. The remaining funds from the IPO will be utilized for general corporate purposes. The Perundurai facility expansion includes setting up new production lines for whey protein concentrate, yogurt, and cream cheese to cater to the rising demand for healthier dairy alternatives.

Strong Production & Sustainable Operations

Milky Mist operates one of India’s largest paneer production units, with a daily capacity of 150 metric tons, supported by fully automated processing infrastructure. The firm sources milk directly from over 67,000 farmers, ensuring traceability and high quality.

On the sustainability front, Milky Mist meets approximately 70-80% of its energy needs through renewable solar and wind power. It also focuses on water recycling and methane-to-energy usage, furthering its commitment to eco-friendly operations. The company is expanding its portfolio to include high-protein, low-sugar, and lactose-free dairy offerings, tapping health-conscious consumer demand.

Market Outlook: Capturing Growing Demand for Premium Dairy

India’s dairy market is rapidly evolving, with increasing urbanisation and disposable incomes fueling demand for branded value-added products. Milky Mist’s premium and conventional dairy offerings are well-positioned to benefit, especially in South India where it currently generates 71% of its revenue, while steadily making inroads into other regions.

IPO Management and Investor Interest

The IPO is being managed by reputed book-running lead managers JM Financial, Axis Capital, and IIFL Capital Services, ensuring a smooth listing process backed by institutional expertise.

Conclusion: Milky Mist’s IPO a Key Milestone in Indian Dairy FMCG Evolution

By filing its DRHP for a Rs 2,035 crore IPO, Milky Mist is set to accelerate growth, gain capital for modernization, and reduce leveraged borrowings. Its focused portfolio of high-margin, value-added dairy products, coupled with efficient supply chain and sustainability practices, makes it a compelling entrant into India’s evolving FMCG dairy landscape.

Investors looking to invest in a homegrown Tamil Nadu brand with pan-India ambitions and a differentiated business model will find Milky Mist’s upcoming public offering an exciting opportunity to participate in India’s fast-expanding dairy FMCG sector.