Motilal Oswal Venture invested Rs 600mn in Parag Milk Foods

Funds managed and advised by Motilal Oswal Venture Capital Advisors Private Limited (“MOVCAPL”) and its associates, have invested Rs. 600 million in Parag Milk Foods Pvt. Ltd (“Parag/ Gowardhan”), one of the fastest growing dairy in the country and selling under the brand “Gowardhan”.

Parag, based out of Maharashtra, is one of the few players that use 100% cow milk for all their products. Its product portfolio includes liquid milk and various dairy products such as milk powder, cheese, ghee, butter, cream, curd, butter milk and gulab jamun mix. Parag has a state-of-the-art Bhagyalaxmi dairy farm spread over an area of 30 acres and equipped with the latest rotary parlour for milking cows. This has been a path breaking initiative by the company and will put the Company in the league of global dairy companies once scaled up.

According to Mr. Raamdeo Agrawal, Chairman of MOVCAPL, “India is rapidly moving from a USD 1 trillion economy to a USD 2 trillion economy with steadily increasing disposable incomes. Rising population coupled with increasing consumerism will boost demand for dairy products. Following the global trends, Cow milk is also gaining importance in India for its better nutritional value. Companies like Parag, which have established strong procurement practices and internationally accepted quality products, will hugely benefit from this upsurge in consumerism.”

Investment in the company offers MOVCAPL an opportunity to participate in an unfolding story of excellence in entrepreneurship in the fast growing dairy space. The amount will be utilized by Gowardhan for its capacity expansion along with branding & marketing initiatives.

According to Mr. Devendra Shah, Chairman of Parag, “Company would be investing around Rs 160 crores over the next 2-2.5 years expanding its capacity to procure and process around 20 LLPD and Rs 50 crores lending to farmers for Backward Integration as well as for development of the Cow & the Dairy Farm. Gowardhan would concentrate on expanding its value added product portfolio across India. This investment from funds managed by MOVCAPL will further propel the growth of Gowardhan.”

Dairy industry in India has come a long way from dependence in 1960s & 1970s to self-reliance. India is the largest milk producing country in the world, followed by USA, Russia, Germany and France. According to Dairy Book 2007, Milk production in 2005 was around 94 mn tonnes and is estimated to be over 100 mn tonnes currently with an annual growth rate of 4%. Cow milk constitutes about 41% of total annual milk production in India and has started to create a strong niche as compared to buffalo or mixed milk.

Mumbai based Investment Bank - Ladderup Corporate Advisory Private Ltd. acted as the exclusive financial advisors to Parag for the deal. 

Sourced From: Adfactors Public Relations Pvt Ltd