IDFC PE’s Parag Milk Foods seeks to double capacity

Parag expects to commit INR4.5 billion to these efforts and would consider raising further funds through an IPO over the next two years, according to Devendra Shah, the company chairman.

Revenues are expected to reach INR12 billion in the current financial year and the company wants to reach INR100 billion by 2020. Around 85% of sales are value-added milk products, with liquid milk accounting for the remainder.

Exports account for 9% of revenue and Parag wants to increase this to 30% in the next few years. Overseas business used to generate 70% of revenue but export dependency was reduced due to the uncertain domestic policy environment.

India's dairy sector is currently worth $70 billion, but with growth of 10% a year it is expected to reach $150 billion by 2020. The country is now the world's largest producer of dairy goods and accounts for close to 20% of global milk output.

When it made the investment, IDFC PE told AVCJ that Parag is attractive because it is one of few players in a fragmented market with a genuine chance of achieving scale.

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• Topics
• Consumer
• Expansion
• South Asia
• India
• IDFC Private Equity
• Consumer
• Growth capital