MUMBAI: US-based investment firm Proterra Investment Partners is in talks with global and domestic PE funds Temasek, Kedaara, Multiples and ADV Partners to sell its 23% stake in Dodla Dairy, said three persons with direct knowledge of the development.
In 2012, Proterra, formerly Black River Asset Management, bought 23% stake in the company for Rs 110 crore. “The company is being valued at about Rs 1,100 crore and will give Proterra 2-3 times returns on its investment,” a banker familiar with the matter said.
Proterra has appointed investment bank Edelweiss to scout for buyers and the final bids are expected soon, said another person involved in the deal. “The promoters are also selling some stake in this transaction. The incoming investor will have a majority stake in the company.”
Mails sent to D Sunil Reddy, managing director of Dodla Dairy did not elicit any response till press time. “Proterra declines to comment,” said John Dillard, a spokesman for Proterra, in an emailed response.
A spokesperson for Temasek in an emailed response declined to comment on market speculation while emails sent to Kedaara, ADV and Multiples did not elicit any response.
Founded in 1998, Hyderabad-based Dodla Dairy procures, processes and sells milk and milk products, including butter, ghee, paneer, curd, flavoured milk and ice cream powder across south India and Maharashtra, Madhya Pradesh, Rajasthan, Gujarat and West Bengal.
The company was founded by Andhra-based Sunil Reddy of the Dodla family of Nellore. According to the company website, it sells around 900,000 litres of milk and six tonnes of milk products every day. In 2014-15, Dodla Dairy posted a revenue of Rs 1,024 crore, up 20.75% from Rs 848 crore the previous year.
Dodla Dairy has also expanded to foreign markets. In 2014, it entered Africa by buying a milk processing asset in Uganda, which at present sells around 15,000 litres of milk daily. The dairy sector continues to attract private equity and strategic investors who sense a huge opportunity in the growing milk and milk products market in India. As per data compiled by the National Dairy Development Board, demand for milk in India is expected to grow to 200 MT in 2022.
