New Delhi: Private equity arm of IDFC today said it has invested Rs 155 crore in the Parag Milk Foods, making it the largest PE deal in the dairy sector.
Parag, which processes nearly 11 lakh litres of milk per day in two plants in Andhra Pradesh and near Pune, would use the funds to build capacities in various products, strengthen procurement network and to provide a partial exit to Motilal Oswal Private Equity which invested in the company in 2008, a joint statement said.
Parag markets its products under the "Gowardhan", "GO" and "Pride of Cows" brands. It has achieved a turnover of around Rs 880 crore in FY12, a 40 percent jump from the previous year.
"IDFC Private Equity Fund III, managed and advised by the Private Equity Group of IDFC Alternatives Ltd (previously known as IDFC Private Equity) has announced an investment of Rs 155 crores in Parag Milk Foods," the statement said.
This is the country's largest PE deal in dairy sector, it said, adding that for IDFC fund, this is the second investment in rural infrastructure and first investment in the dairy sector.
The proposed investment will provide an attractive opportunity for IDFC PE to participate in untapped potential of the rural economy, it added.
"Parag is committed to bring new and exciting products to the market and emerge amongst the top value-added food companies in India. We believe that the investment from IDFC will help us stay committed to these goals," Parag Milk Foods Chairman Devendra Shah said.