Dindigul Farm Product Limited IPO

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The company specializes in the processing of whole milk and skimmed milk to produce a range of dairy ingredients. These include milk protein concentrates, skimmed milk powder, dairy whitener, whey protein concentrate, milk whey powder, casein, unbranded cream, butter, and fat-filled powders for infant milk formula. Their state-of-the-art processing facility, situated in Dindigul, spans over 15 acres.

Procurement Operations

Their procurement operations involve sourcing approximately 50,000 liters of milk per day directly from farmers and an additional 30,000-100,000 liters per day from the open market or third-party suppliers. They have established a robust network of over 150 village collection centers, providing direct access to more than 4,000 farmers and over 50 dairy farms. They also procure skimmed milk from third-party suppliers, primarily from their Group Company, A R Dairy Food Private Limited.

Branding and Market Reach

They market their products under the brand names ENNUTRICA and Activday. In the financial year 2022-23, they sold products across more than 15 states in India and three countries internationally. They aim to expand their international footprint into more ASEAN and European countries. Their primary customers span various industries, including the dairy, food ingredients, nutrition, ice cream, and baking industries.

Industry Participation

They actively participate as a deciding member and panel member in several nutrition summits. Additionally, they are a key partner working with FSSAI on regulations concerning milk protein concentrates.

Conclusion

With a strong emphasis on quality, robust procurement operations, and a commitment to compliance, their company continues to grow and expand its market reach. Their experienced leadership and dedicated management team position them well for future growth, both domestically and internationally.

Objects of the Dindigul Farm Product Limited IPO:

The Issue Proceeds from the Fresh Issue will be utilized towards the following objects: i. Capital Expenditure, ii. Working Capital Requirements, iii. General Corporate Purposes.
DRHP of Dindigul Farm Product Limited IPO
RHP of Dindigul Farm Product Limited IPO

Dindigul Farm Product Limited IPO Details:

Open Date: Jun 20 2024
Close Date: Jun 24 2024
Total Shares: 6,450,000
Face Value: ₹ 10 Per Equity Share
Issue Size: 34.83 Cr.
Lot Size: 2000 Shares
Issue Price: ₹ 51 - 54 Per Equity Share
Listing At: BSE SME
Listing Date: Jun 27 2024

Promoters And Management:

R Rajasekaran, aged 67 years, is the Managing Director and Chairman of the Company. He holds a Master in Science in Chemistry from Annamalai University. He has over 20 years of experience in the dairy processing industry and has played an instrumental role in expanding the domestic operations of the Company. He’s involved in bringing about innovation in the operations and products of the Company. His input has helped the Company to diversify its operations and activities. He held honorary positions in various organisations. He is General Secretary of Tamil Nadu Dairies Association, President of Tamil Nadu Packaged Drinking water manufacturers association. Rajadharshini Rajasekaran, aged 47 years, is Non Executive Director of the Company. She holds a degree of bachelor of technology in industrial Biotechnology from Vivekananda College of engineering for Women, Tiruchengode affiliated to Anna University and Post Graduate diploma in laboratory course in biotechniques from institute of Bioformatics and applied Biotechnology. She is associated as chief quality officer in A R Dairy Food Private Limited. She has been associated with the Company since incorporation and has an experience of more than 10 years in the Industry. N M Ranganathan, aged 62 years, is the Non Executive Independent Director of the Company. He holds a master’s degree in Business Administration commerce from Deriyar University. He is also an Advocate on the roll of Bar council of Tamilnadu and Puducherry. He was appointed on Board on November 18,2023 as additional ID and regularised on December 1,2023 at the EGM.

Financials of Dindigul Farm Product Limited IPO:

Particulars ( In Lakhs )
2021
2022
2023
9M-FY24
Revenue from Operations 1,763 2,832 8,158 6,875
Other Income 78 13 42 2
Total Revenue 1,841 2,845 8,199 6,877
Cost of Material Consumed 1,331 2,046 6,454 4,775
Changes in inventories 24 212 -453 -270
Employees Benefit Expenses 251 259 325 312
Other Expenses 242 468 904 1,123
EBITDA -6 -140 969 937
OPM (%) -0.34% -4.93% 11.82% 13.62%
Depreciation & Amortisation 236 203 194 158
EBIT -242 -343 775 778
Finance Cost 220 246 258 190
PBT -462 -417 517 589
Tax 0 0 0 0
PAT -462 -417 517 589
NPM (%) -25.10% -14.64% 6.30% 8.56%
No.of Shares 244.29 244.29 244.29 244.29
EPS -1.89 -1.70 2.11 2.41

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Dindigul Farm Products Limited 82 5 2.11 25.5 54 132
Dodla Dairy Limited 2,812 122 20.55 38.1 1,047 6,228
Parag Milk Foods Limited 2,893 53 4.54 24.5 186 2,219
Modern Dairies Limited 216 12 5.21 8.2 52.3 122
* All the data is as per FY23.

Recommendation on Dindigul Farm Product Limited IPO:

1. The company specializes in processing whole milk and skimmed milk to produce a wide range of dairy ingredients. These include milk protein concentrates, skimmed milk powder, dairy whitener, whey protein concentrate, milk whey powder, casein, unbranded cream, butter, and fat-filled powders for infant milk formula. 2. Quality Assurance and Compliance Their management system complies with various industry standards and regulations, such as FSSAI, Halal, Kosher, and the Export Import Council of India. They utilize automatic milk analyzers at village-level collection centers and conduct combined quality and sampling methods at chilling centers. Regular testing by NABL-approved food testing labs ensures compliance with quality certifying authorities. 3. Product Portfolio They market their products under the brand names ENNUTRICA and Activday. Their diverse product portfolio caters to various industries, including dairy, food ingredients, nutrition, ice cream, and baking. Their products can be categorized into the following segments: i. New Age Nutrition                                        ii. FAT and SNF Standardization iii. Baking and SMP Replacement                iv. Legacy Nutrition v. Infant Nutrition                                             v. Butter 4. Market Reach and Expansion In the financial year 2022-23, they sold products across more than 15 states domestically and exported to three international markets. They aim to expand their international footprint, particularly in ASEAN and European countries. Their strategic location near a seaport facilitates easy access to these markets, enhancing their competitive edge. 5. Competitive Landscape The dairy industry in India is highly fragmented, with competition from both organized and unorganized players. The lack of entry barriers poses a threat from new entrants. Many competitors have larger capital bases and broader product ranges. 6. The Revenue has Increased from Rs.17 Crores in FY21 to Rs.81 Crores in FY23. 7. The EBITDA has Increased from (-6) Lakhs in FY21 to 9 Crores in FY23. 8. The PAT has Increased from (-4) Crores in FY21 to 5 Crores in FY23. 9. As per FY23, CFO/EBITDA is 0.99, As per FY24, EPS is 3.21, 10. Market Capitalization is 132 Crores & P/E is 16.8x based on FY24.

Lead Manager of Dindigul Farm Product Limited IPO:

  1. Beeline Broking Limited

Registrar of Dindigul Farm Product Limited IPO:

  1. Link Intime India Private Limited

Company Address:

Dindigul Farm Product Limited 2/52-3, Pillaiyarnatham Pithalaipatty Post, Dindigul, Dindigul,-624002 Phone: +91 94980 99930 Email: cs@ennutrica.com Website: https://ennutrica.com/

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