Dodla Dairy IPO Review – Know Date, Price, GMP, Financial Details In 5 Easy Steps

  • Post last modified:June 24, 2021
  • Post category:Stock Market
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Dodla Dairy IPO is getting launched for subscription on Wednesday 16, June 2021, and will be available for subscription till Friday, June 18, 2021.

The company is looking to raise Rs.520 crore through public issue with a fresh issue worth Rs 50 crore and a offer-for-sale (OFS) up to 1.09 cr equity shares by TPG Dodla Dairy Holdings, Dodla Sunil Reddy, Dodla Deepa Reddy and Dodla Family Trust.

The equity shares of Dodla IPO are proposed to be listed on both BSE and NSE.

The Dodla Dairy IPO issue will be sold in the price band of Rs 421-428 per share and the minimum lot quantity is 35 shares and in multiples thereof translating to a minimum investment of Rs 14,735 at upper end.

The latest Grey market premium price (GMP) for Dodla Diary IPO’s were seen up by more than 39.8% and were trading around Rs.580-591 as of today, This means people are expecting it to open on listing day to be at least at Rs.550 or more.

Having said that, GMP does not mean in anyway a recommendation for an IPO, the financials of a company and its future prospectus tells a lot.

Here is the thing no one can tell you whether the IPO will going to make a stellar debut or not, it is you who have to decide based on available information about the company.

 



 

Moreover the IPO’s now a days are very hot market every one wants to earn some quick money on listing day itself and there is nothing wrong about it.

Having said that, one must not forget to check the financials and do not fall for any recommendation from anyone, it is you hard earned money, you should decide whether to opt for the IPO or not.

You may have watch various YouTube channels or read on different websites about recommendation for stocks and IPO, it is my humble suggestion and request please do not ever fall prey to it. Better than this is to invest in ETF’s?

Therefore, whenever you are buying IPO make sure the money invested is not the one which you my need it urgently, always use extra money which you may not require in near future, Otherwise stay away completely.

Now, coming back to the Dodla Dairy IPO let us talk about in brief about the company and its financials and other details step by step.

 

About Dodla Dairy Limited (DDL):

Dodla Dairy Limited is a public limited company having its registered and corporate office at Hyderabad City of Telangana State in India. The company was incorporated in the year 1995 and production commenced in 1997.

Currently, they have procurement centered in 5 states and their products are available for purchase in 11 states. They have 94 milk chilling centers.

Their distribution and marketing operations consist of distribution of products through 40 sales offices, 3,285 distribution agents, 861 milk distributors and 544 milk product distributors across 11 states in India.

Additionally, as of March 31st, 2021, their milk and dairy based VAPs are also available through 393 “Dodla Retail Parlours” which commenced operations in 2016 and are spread across the states of Andhra Pradesh, Telangana, Tamil Nadu and Karnataka.

The product portfolio consists of Milk, Butter Milk, Ghee, Curd, Paneer, Flavoured Milk, Doodh Peda, Ice Cream and Milk Based Sweats. These products are conveniently packed to suit various needs of its consumers.

Apart from domestic they have subsidiaries in other parts of the worlds such as in Africa (Kenya, Uganda), Singapore etc.

 



 

Financials Of Dodla Dairy Limited (DDL):

As of March, 31, 2021, the company had a total outstanding indebtedness of Rs 87.3 crore comprising long term borrowings, working capital facilities and NCDs.

The company’s revenue from operations increased at a CAGR of 15.98% over fiscal 2018 to fiscal 2020 and amounted to Rs 21,39.37 crore in fiscal 2020.

While the EBITDA increased during the same period at a CAGR of 11.8 1% and amounted to Rs 140.9 crore, the profit after tax amounted to Rs 49.87 crore in fiscal 2020.

On the performance front, the company had total income of Rs 21,456.49 million in Fiscal 2020, an increase of 26.25% over its total income of Rs 16,994.59 million in Fiscal 2019.

Its profit for the year decreased by 20.54% from Rs 627.62 million in fiscal 2019 to Rs 498.71 million in fiscal 2020.

 

Financials Of Dodla Dairy Limited:

 

The revenue from operations, EBITDA and profit after tax for the nine months period ended December 31, 2020 were Rs 1,413.51 crore, Rs 206.5 crore and Rs 116.38 crore respectively.

The company stated the return on equity and return on capital employed for fiscal 2020 were at 11.50 per cent and 17.01 per cent respectively.

 

Dodla Dairy IPO Review - Know Date, Price, GMP, Financial Details In 5 Easy Steps

 

Debt to equity ratio (calculated as total borrowings/total equity of our Company) was 0.17, 0.35, 0.39 and 0.37 as
on December 31, 2020, March 31, 2020, March 31, 2019 and March 31, 2018 respectively.

 

Financials Of Dodla Dairy Limited (DDL):

 

Dodla Dairy is constantly improving margins, with decent pricing and its focus on value-added products, the IPO is likely to attract investors and can be proved good for long term investment horizon.

 

Dodla Dairy Peers Comparison:

Dodla Dairy has the best gross turnover ratio amongst the peer set On fixed assets utilisation, Dodla Dairy Limited fared the best with gross asset turnover ratio averaging 4.4 times in FY20, followed by Creamline Dairy Products Limited. (2.8 times).

Dodla Dairy ranks third in terms of EBITDA margin and second in terms of PAT margin In fiscal 2020, Tirumala Milk Products has the highest EBITDA margin of 11.5% followed by Hatsun Agro (10.5%) and Dodla Dairy (6.6%).

Tirumala Milk Products also has the highest PAT margin of 5.6% followed by Dodla Dairy, with a PAT margin of
2.3%.

The P/E ratio for Dodla dairy limited post the IPO will be around 51x, Whereas the average P/E for the industry is around 68X, 123.5x being the highest.

 

Dodla Dairy Peers Comparison:

 

Dodla Dairy is the third largest dairy in terms of milk procurement per day Amongst the players for whom data was available.

Hatsun Agro Product Limited was the largest in terms of milk procurement (2651 tonnes per day as of FY20), followed by Heritage Foods Limited and Dodla Dairy Limited, both of whom procured around 1375 and 1178 tonnes per day.

 



 

Dodla Dairy ranks third in terms of number of plants amongst the peers, In terms of the number of plants, Hatsun Agro Product Ltd has the maximum number of plants (18), followed by Heritage Foods Ltd (16) and our Company (14) (including the cattle feed plant acquired from OPL).

 

Dodla Dairy Peers Comparison:

 

Dodla Dairy is the fastest growing company amongst the peers between FY17-20 Hatsun Agro Product Limited is the largest in terms of FY20 revenue followed by Heritage Foods and Dodla Dairy.

Over FY17 -20, revenue for Dodla Dairy Limited grew the fastest, at a CAGR of 14.1%, followed by Heritage Foods Limited (12.8%) and Hatsun Agro Product Limited (8.3%).

Hatsun Agro Product Limited and Dodla Dairy Limited also have a higher proportion of dairy business revenue emanating from value-added products, at 35% and 33% respectively as compared to other peer set.

Dodla Dairy has the highest return on capital employed (RoCE) amongst the peers in fiscal 2020. In fiscal 2020, Dodla Dairy Limited has the highest ROCE of 17% followed by Hatsun Agro Limited (14.9%) and Creamline dairy
(9.3%).

RoCE must be viewed in the context of investments made by players in expanding capa city, especially in VADPs. Setting up facilities for manufacturing VADPs is more capital intensive and tends to pull down RoCE during the initial years.

However, despite the having a higher share of VADPs, Dodla Dairy Limited and Hatsun Agro Limited have still maintained a high RoCE.

 



 

Dodla Dairy IPO Details:

 

Dodla Dairy IPO Details:

 

Dodla IPO Details
Dates
IPO Open Date
16-Jun-21
IPO Close Date
18-Jun-21
Basis of Allotment Date
23-Jun-21
Initiation of Refunds
24-Jun-21
Credit of Shares to Demat Account
25-Jun-21
IPO Listing Date
28-Jun-21

 

Objects of the Offer:

The company plans to utilise the net proceeds for repayment/ pre-payment, in full or part, of certain borrowings availed by the company from ICICI Bank Limited, Hongkong and Shanghai Banking Corporation Limited and HDFC Bank Limited. The remaining proceeds will be used for capital expenditure and other general corporate purposes.

 



 

Frequently Asked Question (FAQ):

1.What Is The Symbol For Dodla Dairy Limited ?

Ans: The Symbol is DODLA

2.When Dodla Dairy IPO Coming?

Ans: The Issue Period for Dodla Dairy IPO is 16-June-2021 to 18-June-2021.

3. Post Modification Period For Dodla Dairy IPO?

Ans: The Post issue Modification Period for IPO is 21-June-2021 (10.00 A.M. to 11.00 A.M.).

4. What Is The Cut-off Time Period For UPI Mandate For Dodla Dairy IPO?

Ans: The Cut-off time for UPI Mandate Confirmation is 21-June-2021 (upto 12:00 PM).

5. What Is The Issue Type For Dodla Dairy IPO?

Ans: The Issue Type is 100% Book Building.

6.What Is The Price Band For Dodla Dairy IPO?

Ans: The Price (Band) Range for Dodla Dairy is Rs.421 to Rs.428 per equity share.

7. What Is The Lot Size For Dodla Dairy IPO?

Ans: The Bid Lot i.e. Minimum Order Quantity (lot size) for Dodla Dairy IPO is of 35 Equity Shares and in multiples thereof 35 Equity Shares.

8. Who Are The Book Running Lead Managers For Dodla Dairy IPO?

Ans: The Book Running Lead Managers are, ICICI Securities Limited and Axis Capital Limited

9. What Is The Face Value For Dodla Dairy IPO?

Ans: The Face Value is of Rs.10 whereas The Tick Size is of Rs.1

10. What Is The IPO Market Timings For Dodla Dairy IPO?

Ans: The IPO Market Timings is 10.00 a.m. to 5.00 p.m.

Apart from above points:

The Maximum Subscription Amount for Retail Investor is Rs. 2,00,000

The Name of the Registrar is Kfin Technologies Private Limited

The Contact person name number and Email id is Mr. M Murali Krishna, 040 6716 2222, [email protected]

The Address of the Registrar is Selenium Tower B, Plot 31 & 32, Gachibowli,Financial District, Nanakramguda Serilingampally,Hyderabad 500 032,Telangana, India

 



 

Where To Check Dodla Dairy IPO Application And Allotment Status?

As an investor or trader generally we are curious and anxious to know the results of the application as soon as possible. To ease the anxiety, both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) have come up with dedicated pages and links which investors can use.

NSE

The NSE has an IPO bid verification module. It can be used to verify the IPO application details uploaded on the exchange bidding system by your member/bank. The data of the bid details uploaded by the member/bank would be available on T+1 day (where T would be date receipt of bid on NSE platform).

In addition, the data would be available until six days after the issue closure date. This gives the investor enough time to verify the data and instruct the member/bank to make any changes, if required.

Exchange will also provide allotment information as provided by the registrar to the issue.

An investor can avail this facility by registering using his/her PAN details. After registration, the investor will receive an email notification from NSE on the registered email address. That email will provide the login details.

The following link can be used for the same:

https://www.nseindia.com/products/dynaContent/equities/ipos/ipo_login.jsp

BSE

The BSE has also come up with a similar platform.

This unique facility allows investors to verify the status of their application submitted to a Trading Member or a SCSB (Self-Certified Schedule Banks).

The investor can check his application status/information on the website until one week after issue close.

The following link can be used by investors:

https://www.bseindia.com/investors/appli_check.aspx

 

Conclusion:

The average intake in India is low in comparison with other developed nations which average more than 100 gm/person/day as well as developing countries which average about 80-90 gm/person/day. In India, milk and dairy products are an important source of dietary protein, especially for the vegetarian population.

India is the global leader in milk production, contributing ~30% of milk production in 2020. Top six milk -producing countries, viz., India, USA, China, Pakistan, Brazil and Germany, together contributed more than ~60% of the world’s milk production. India’s share in overall production increased to 25% in 2015 from 30% in 2020.

The Indian dairy market industry has grown at a CAGR of ~10% between fiscal 2015 and 2020 to reach ₹6.7 trillion in fiscal2020. This growth has come on the back of a 6-7% increase in volumes and 3-4% increase in price realizations. 

Milk was classified as an essential item and hence the industry wasn’t severely impacted despite supply and demand side challenges due to Covid-19, In the initial months of lockdown.

However, the dairy industry faced challenges in last-mile customer reach, availability of labour at plants, logistical issues such as availability of vehicles for transportation, and adhering to COVID19 safety protocols for all employees.

 



 

Let us checkout some of the strengths and risk of Dodla dairy:

Some of the qualitative factors and strengths of Dodla Dairy Limited:

Consumer focused dairy company with a diverse range of products under the “Dodla Dairy” and “Dodla” brands;

• Integrated business model with well-defined procurement, processing and distribution capabilities

• Focused engagement and long term relationship with dairy farmers

• Stringent quality control procedures

• Financial Growth and operational efficiencies

• Experienced Board and senior management team

 

Some of the Risk Factor for Dodla Dairy Limited:

  1. Dependent on the supply of large amount of raw milks
  2. Covid-19 pandemic and other health concerns that may impact the procurement, distribution or sale of milk
  3. Contamination of milk or product tampering resulting in a legal liability
  4. seasonal change in the demand of milk and its inability to forecast it accurately
  5. Procurement and processing are primarily based in south India, hence any adverse developments in this region can potential impact is operation’s
  6. Inability to services existing debt agreements
  7. It subsidiaries OPL and Dodla Kenya have incurred losses in the past

 

Therefore, it is always advisable to go through Dodla IPO – RHP to know in detail about the company.

The only thing which should be bothering you is the research you did before applying for the IPO. Investing in IPO is risky as well as profitable.

Having said that you also need to keep in mind important things mentioned above before applying to IPO’s as the risk is always involved.

For More Information Do Checkout Basics of IPO and FAQ Here.

If you are a beginner in trading and investing, please read this amazing guide on How stock market works in India?

If, you have liked the content please do share it with your friends or on social media, as sharing do bring the good karma. If you have any questions or feedback you can leave them in comment box below.

Note: Please do your own research and make investment. Moneycontain will not be responsible for any of your losses at all. The point made is for educational purpose only and intended to give information. All investments are subject to risks, which should be considered prior to making any investments. The above details are compiled from information available on public platforms. These are not buy or sell recommendations.

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