November 1, 2011
Nilgiri Dairy to launch public offer to raise US$60 million
Besides establishing an initial public offer to collect over US$60 million, Nilgiri Dairy Farm Pvt Ltd is also giving an option to Actis Capital LLP, to leave the retail venture, The Wall Street Journal reported Monday (Oct 31).
The company plans to utilise the proceeds primarily to increase its retail network to nearly 250 stores by the end of next financial year 2012-13, Prabhu Ramachandaran, a non-executive director on the board of Nilgiris Group said.
It plans to file a share sale prospectus in the financial year ending March 2012, based on the market conditions, he said.
Established in 1905 by the Ramachandaran family, Nilgiri Dairy runs about 140 retail stores branded as Nilgiri 1905 through franchisees in southern India. The company also makes and markets bakery and dairy products.
The founders own 35% stake in Nilgiri Dairy, of which 28% is held by Ramachandaran. The remaining 65% stake is owned by UK-based Actis, which acquired the stake, along with management control from the founders in 2006.
Ramachandran said that if the company does not come up with the proposed public share sale due to sluggish market conditions, it also has plans to bring in a strategic partner to replace Actis. The company is already in talks with prospective partners, he said, adding that the founding family will not divest its stake further.
Nilgiri Dairy aims INR10 billion (US$204 million) sales in 2011. It reported sales of nearly INR6 billion (US$123 million) so far this year.