IDFC Private Equity Fund III, managed and advised by the private equity group of IDFC Alternatives Ltd (previously known as IDFC Private Equity), has invested Rs 155 crore in Parag Milk Foods Pvt Ltd.
Proceeds from this deal will be used to build capacities in various product lines, strengthen its procurement infrastructure and provide a part exit to existing investor, Motilal Oswal Private Equity, which has invested in the company in 2008.
This is IDFC PE’s first investment in the dairy sector and the second in rural infrastructure.
According to Girish Nadkarni, Partner at IDFC Alternatives, Parag touches the lives of more than one lakh farmers.
The Rs 880-crore Parag is one of the leading private dairy companies in the country and markets its products under the ‘Gowardhan’, ‘GO’ and ‘Pride of Cows’ brands. It has a market leading position in cheese and ghee segment among the pizza chains.
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.
IDFC Alternatives, which manages funds of $2.2 billion, is a wholly-owned subsidiary of IDFC Ltd and one of the largest infrastructure focused private and project equity investors in India.
IDFC Private Equity, a part of IDFC Alternatives, manages funds of Rs 5,700 crore ($1.3 billion) across three funds. Over the last eight years, IDFC PE has made 34 investments and has had 18 liquidity events.