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IDFC makes maiden investment in Indian dairy sector

18 Sep 2012

IDFC has made one of the largest private equity investments in the Indian dairy sector by picking up a minority stake in Parag Milk Foods for $28.6m.

The firm made the investment through its third private equity fund, a $700m vehicle closed in 2008.

IDFC’s investment will enable a part-exit for Motilal Oswal Venture Capital, which bought into the company four years ago.

Girish Nadkarni, partner at IDFC Alternatives, said, “Parag Milk has created strong pan-India brands.

“It has strengths across procurement, processing and distribution which are unique among private sector dairy companies.

Parag produces about one million litres of milk per day through Gowardhan, the company it founded in 1992.

Earlier this month it emerged Singapore sovereign wealth giant Temasek was in talks with Actis to buy Bangalore-based retail chain Nilgiris Dairy Farm, although a dispute between the emerging markets investor and the company’s promoters threatened to derail any potential deal.

Actis is understood to have hired HSBC to sell the business, India’s Business Standard reported, although the promoters, the Mudaliar family, are not interested in selling their 33 per cent stake.

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