MOPE to invest $16m in India's Dairy Classic

The company will use the new capital to expand production capacity, increase brand awareness and grow its store footprint, particularly in tier-two and tier-three cities. At the moment it sells through 15,000 retailers, mostly in southern India. MOPE will take a significant minority stake in the business.

Dairy Classic produces ice cream and other frozen dairy products under the Dairy Day brand, and claims to be one of the top five ice cream brands in southern India. Currently its factory in Bangalore has a production capacity of more than 30,000 liters per day, and it is planning an additional 100,000 square foot facility in the city. The company's revenue reportedly reached INR1.5 billion in the most recent financial year.

MOPE made its investment through its second India Business Excellence Fund, which launched in 2011 and closed in 2013 at $155 million. The vehicle seeks minority stakes in small and medium-sized enterprises (SMEs) in India, with a focus on the consumer, financial services, healthcare and manufacturing sectors.

Dairy Classic is the second Indian dairy company to gain support from MOPE, after Parag Milk Foods, to which the firm committed $14.1 million in 2008. MOPE part exited Parag in the company's IPO earlier this year, selling 5.6 million shares for a return of around INR1.2 billion. IDFC Alternatives also made a partial exit in the offering, realizing INR1.8 billion.

Other PE deals in India's dairy space this year include KKR's INR5.2 billion investment in Kwality, which produces butter, milk, yogurt and other dairy products, and a INR445 million investment in ice cream and yogurt maker Drums Food International led by DSG Consumer Partners and Verlinvest.

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• Topics
• South Asia
• Consumer
• Industrials
• Expansion
• India
• Motilal Oswal Private Equity
• Growth capital