SME IPO: Dindigul Farm Product files draft IPO papers to raise Rs 38.70 crore

Dindigul Farm Products

Dindigul Farm Product Limited has filed the draft red herring prospectus (DRHP) with Sebi for raising funds through a public offer. The company will issue fresh equity shares of 64,50,000 at a price band of Rs 55-60 each, sources told Moneycontrol.  At the upper price band, the company will raise Rs 38.70 crore.

Dindigul Farm Products is primarily engaged in processing of milk proteins, dairy ingredients and infant milk formulae, including milk protein concentrates, skimmed milk powder, dairy whitener, whey powder, milk whey powder, acid casein, sodium caseinate, fat-filled powders and infant milk powders. The processing facility spread over 15 acres is situated at Dindigul.

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According to the DRHP, proceeds from the fresh issue will be utilised towards capital expenditure and for working capital requirements. Approximately Rs 12.22 crore will be utilised for funding capital expenditure and Rs 13.84 crore for funding working capital expenditure.

Dindigul Farm Products intends to start with the production line of butter and hence it will be utilising Rs 12.22 crore from the net proceeds towards purchase of plant and machinery for the production of butter.

Indrayani Biotech Limited holds 42.59 percent in the company, while R Rajasekaran holds 10.80 percent and Rajadharshini Rajasekaran holds 8.02 percent in the company , according to the DRHP. Minerva Ventures Fund holds 1.11 percent.

The company has reported its revenue at Rs 81.57 crore as on March 2023. The gross profit margins is reported at 26.43 percent, while the net profit margin stood at 6.33 percent. The profit margins are better than the peers in the industry. Almost 70 percent of its revenues come from its top five customers while the total long-term debt-to-equity ratio stands at 5.75 levels.

Beeline Capital Advisors Pvt Ltd is the book running lead manager for the issue.

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