IDFC Alternatives invests Rs 155 crore in Parag Milk Foods

IDFC Private Equity Fund III, managed and advised by the Private Equity Group of IDFC Alternatives Limited ( previously known as IDFC Private Equity) , has announced an investment of Rs 155 crores in Parag Milk Foods Private Limited. This is the second investment for the fund in 'rural' infrastructure.

This is the first investment by IDFC Private Equity (IDFC PE) in the Dairy sector. The proposed investment will provide an attractive opportunity for IDFC PE to participate in untapped potential of the rural economy.

Parag is one of the leading private dairy companies in India and markets its products under the "Gowardhan", "GO" and "Pride of Cows" brands. The Company's products are made from 100% cow milk. Parag has a strong market leading position in cheese and ghee with many leading pizza chains as its customers. Parag recently launched its UHT milk product under the "GO" brand.

The proceeds from this deal will be used to build capacities in various product lines, strengthen its procurement infrastructure and provide an part exit to existing investors, Motilal Oswal Private Equity who invested in the company in 2008.

The company processes close to 11 lakh litres of milk per day across its two plants in Manchar near Pune and Palamner in Andhra Pradesh. Parag has the largest cheese plant in Asia with a capacity of 40 tonnes per day. Parag has achieved a turnover of around INR 8,800 million for FY12, a 40% jump from the previous year.