Parag Milk Foods Ltd IPO Message Board (Page 25)

Rajeev give ur valuable opinion regarding parag milk IPO ..can I apply or not?

Avoid Tushar.

Thx Rajiv

Here people are speaking about taking a chance by subscribing this issue. Some one are saying , experts advised against this IPO, being they want to garner maximum share of this IPO by which they will be able sale at , similar premium as in the case of Interglobe Aviation.
One thing i would like to share with all of u , which we all know but presently not imaging its future impact.
Personally i m very bullish with entire fmcg space due to increasing consumer discretionary spending habits . before 6 months , i realised that, i m wrong. Patanjali becomes threat for entire listed FMCG space with their robust growth number. They had achieved sales of 5000 crores in 2015-16 from Rs. 2000 crore in 2014-15 and set next year target as 10000 crore for 2016-17. They leave behind Marico, Jyothi lab and even Colgate and now challenging biggest player unilever with 3 years warning.

We know that presently approx. 50% sales of Patanjali arrives from Cow milk ghee. Despite such a robust growth, no one is able to successfully challenge their products on inferior quality grounds.
There are high chances that entire FMCG sector will face negative volume growth in mid to long term.
One may ask, how they are able to provide products at discount to its peers. Ramdev told that , here our employees works with a motto of service not for money. Lesser marketing cost.

One may also wonder on knowing that, baba ramdev does not hold any stake in patanjali. 94% share are owned by balkrishna ji and 6% held by a NRI family with initial investment of just 60 crores.
I m sharing this just for information so that people can understand , how much they will be wrong, if they subscribe parag IPO.

Actually balkrishnan holding ramdev stakes on his behalf as hidden agreements between them,it all started after they entered their gurus shankar maharaj premises,hariduar for sharan or accommodation, later shankar maharaj was found disappeared

U may allege them on personal issues but their products are far better and cheap than those , which are offered by their listed peers.

PARAG MILK FOODS LTD.
STRENGTHS :
1. 57% SALES FROM VALUE ADDED PRODUCTS
2. BRANDS LIKE GOWARDHAN, GO, PRIDE OF COWS WITH DISTINCT POSITIONING
3. 32% SHARE IN HIGH GROWTH CHEESE MARKET
4. STRONG PRESENCE IN HIGH GROWTH MODERN AND GENERAL TRADE
5. USAGE OF 100% COWS MILK
6. 70% INCREASE IN PROCESSING CAPACITY POST EXPANSION

OPPORTUNITIES:
1. RISING DEMAND FOR VALUE ADDED MILK PRODUCTS
2. GOVT INCENTIVES FOR ORGANISED PLAYERS IN THE DAIRY SECTOR LIKE VAT AND TAX BENEFITS
3. RISING CONSUMER FOCUS ON HEALTH AND HYGIENE OF MILK & MILK PRODUCTS
4. STRONG PRESENCE IN HIGH GROWTH MODERN TRADE
5. LOW SHARES OF HIGH POTENTIAL SEGMENTS LIKE UHT MILK, WHEY POWDER ETC, IN TOTAL SALES.

Generated thin margins of 2% to 2.4% in last 3 years.
There are outstanding criminal proceedings against the Company, its Promoters and one of its Directors.
Its operations are dependent on the supply of large amounts of cow’s raw milk, and its inability to procure adequate amounts of good quality raw milk, at competitive prices, may have an adverse effect on its business, results of operations and financial condition.
A slowdown or shutdown in its manufacturing operations or the under-utilization of its manufacturing facilities could have an adverse effect on its business, results of operations and financial condition.
They do not have long term agreements with suppliers for other raw materials and an increase in the cost of or a shortfall in the availability of such raw materials could have an adverse effect on its business, results of operations and financial condition.
The improper handling, processing or storage of its raw materials or products, or spoilage of and damage to such raw materials and products, or any real or perceived contamination in its products, could subject us to regulatory action, damage reputation and have an adverse effect on its business, results of operations and financial condition.
The examination report of company Statutory Auditors on its restated financial statements contains certain qualifications.
Its manufacturing facilities and procurement operations are concentrated in a few regions and any adverse developments affecting these regions could have an adverse effect on its business, results of operations and financial condition.
Its Subsidiary, Bhagyalaxmi Dairy Farms Private Limited has incurred losses and had negative net worth in the past.
They have had negative net cash flows in the past and may continue to have negative cash flows in the future.

Parag Milk Foods is a very Good Company, with good fundamentals. Earlier people were more sided towards products of buffalo Milk, but Parag Milk Foods focussed on Sale of Products made from Cow Milk, mentioning the benefits for the same, therefore other companies have started following it, including Patanjali.
Also it has the Biggest Cheese Plant in Asia, Even though Amul Company is the Market Leader, they face thorough Competition in the Market because of Gowardhan & Go brands.
This is definitely a Long Term Company with Very Good Management Team, involving the Promoters Mr. Devendra Shah & Mr. Pritam Shah, who themselves are fully Involved in the Business & other well Known names like Mr. B.M. Vyas, who was the Managing Director of Amul Company since last 3 Decades, is the Director in Parag since 2010.
He was the Person who was the Reason for the Growth & Functioning of Amul Company.
They have Added a new Plant for Whey Protein, where Amul was the Lone Brand in the Market.
They have revolutionized Packaging of the Products, as other companies started following their Attractive & Modern Packaging., which was only seen in Other Western Countries before.
They stand out in the Market as Products of Premium Quality & Premium Packing, & there fore many well Known Manufacturer Prefer using Products of Parag Milk Foods as Raw Material.
So in my Opinion Parag Milk foods is a very Good Company for Long Term Investment.

This is my personal view about this IPO:
(Comments on this appreciated)

Risk taking retail investor can apply this IPO at 1:55 pm (SBI Online application cut off time is 2 pm on last day) after looking QIB / NII /HNI subscription data.

If 227 is listing price in that case small investor can make marginal money of Rs. 620 (Rs. 100 transaction cost per lot)

ROI would be 4.8 %

If we consider it as a normal business this is very fair return.

Greedy people cant think in a wise manner so they expect every ipo like Alkem or Dr Lal where 30%-40% return in one day.

People pray for god for Thyro and Ujjivan where allotement ratio is very thin and avoiding Parag where highest chance of allotement.

I believe people can think again and apply if they want to make money in a smart manner in highest allotement chance.

P.S. forgive me for spelling and Grammar mistake

Septa Sir,
I agree with your concerns about discount opening. I have seen this especially for loss making companies poorly managed or rated companies during IPO subscription. There is slight chance of listing could be at 227 coz this is profitable company.

maybe Virat however is Rs 227 less 12 a fair price Imo it NO. it could list at 20% premium of all i know however question again is same is 215 a fair price for company with so many issue which i have listed earlier and the answer is no. So that is reason i said Avoid anyway best of luck Virat Karani and i hope for ur sake it list a premium

overprice ipo fair valve 150/-

septa sir & eagleye,
as per the financials of the company what are the fair value of Parag Milk?

around 160 to 170

Subscription data today reflects broadly negative view on Company...avoid application and for those who have applied...withdraw the application and scramble! Not worth applying!

Agree 100% Neotrade the issue is avoid high risk but Neotrade with prabhat even with worse fundamental then Parag u where very very bullish. Any reason for liking Prabhat like family and Parag as enemy competitor.

Fundamentally...Prabhat has higher margins than Parag...has a huge B2B business which tends to be sticky and predictable as FMCG / baby food companies dont change vendors at the drop of a hat...also if one is a supplier to large FMCG / baby food companies then it speaks a lot about the quality of your products...and so I like Prabhat over Parg...delta may come in Prabhat if he is able to create a strong B2C business which is curretnly I think about 25% of his revenue...

Avoid!

Parag Milk Foods Ltd INR.220-227 Long term Growth Story in Milk.
Parag milk foods ltd is the integrated farm company which has presence
in entire value chain. Each of its brands is positioned to get premium pricing. It is
growing its business in value added products like ghee, butter, cheese, Paneer,
Whey protein, etc. and is having 32% market share in cheese market. Revenue
for 9MFY16 is around 12,311.8 Mn and is growing around 21.6% CAGR over
5years. Its EBIDTA for 9MFY16 is around 8.8% which was 7.8% in FY11. PAT for
9MFY16 stood at around 319.2 Mn and the margin was around 2.6% compared to
0.1% in FY11. We believe with Parag being in production and distribution of cow
milk and all other products being vegetarian is positive for a company.

Outlook Valuation: At the upper end of the issue price band, the company is
seeking a P/E multiple of 37.6x its 9MFY2016 annualized earnings based on preissue
outstanding shares. This is lower than its close peer Prabhat Dairy’s
valuation, which is trading at a higher multiple of 49.8x its 9MFY2016 annualized
earnings (despite of PMFL’s better return ratios). Further, retail investors will be
given a discount of `12/share. Considering the company has a diversified product
basket, strong brands and wide distribution network, we believe that the company will
continue to perform well on both the top-line and the bottom-line front. Hence we
recommend investors to Subscribe to the issue from a longer term perspective

Khambatta Securities has come out with its report on Parag Milk Foods IPO. The research firm has recommended to "SUBSCRIBE" the IPO in its research report as on May 06 , 2016. (more) , Khambatta Securities | Khambatta Securities report on Parag Milk Foods IPO Company Profile Parag Milk Foods Limited is one of the leading manufacturers and marketers of dairy-based branded foods in India. Company commenced its business in 1992 with collection and distribution of milk and have now developed into a dairy-based branded consumer products company with an integrated business model, manufacturing a diverse range of products including cheese, ghee (clarified butter), fresh milk, whey proteins, paneer, curd, yoghurt, milk powders and dairy based beverages targeting a wide range of consumer groups through several brands. Parag derives all of its products only from cows „milk. Parag‟s aggregate milk processing capacity is 2 million litres per day and its cheese plant has the largest production capacity in India, with a raw cheese production capacity of 40 MT per day. Company‟s „Gowardhan„ and „Go„, are flagship brands and are amongst the leading ghee, cheese and other value added product brands in India. Company‟s manufacturing facilities are strategically located at ManINR 500 million) At the price band of Rs 220-227, Parag‟s IPO is expensive compared to direct competitors. At upper price band of Rs 227, stock is available at 50.4x FY15 EPS and 34.9x FY16E EPS, while industry average is currently 29.8x. However, we believe that company is poised to grow at healthy rate, consequently, re-rating will render the valuation cheaper compared to industry average. Hence we recommend, investors with medium to long term view can “SUBSCRIBE” this IPO.

Subscribe to Parag Milk Foods IPO: ICICI Direct ICICI Direct has come out with its report on Parag Milk Foods IPO. The research firm has recommended to "SUBSCRIBE" the IPO in its research report as on May 03 , 2016. (more) , ICICIdirect.com | ICICI Direct report on Parag Milk Foods IPO Parag Milk Foods (PMF), established in 1992, is in the business of manufacturing and marketing dairy-based branded food products. PMF’s production facilities are in Mancurrently value added products contribute ~66% to its sales) and enhancing its presence in the retail space, we expect the margins of the company to improve in future from the present level of 8.8% in 9MFY16. We believe PMF is available at fair valuations considering the opportunity size ahead of the company in the dairy industry that is constantly in the process of evolution from raw milk to focus towards value added milk and milk products. Also, the discount of | 12/share on final issue price for retail investors on offer increases the attractiveness of the company for long term investors. We recommend SUBSCRIBE on the IPO.

Parag Milk Foods Ltd.,- 1st Day Sub Fig., @ 5 P.M.:
QIB* - 00.13×
HNI - 00.03×
RET - 00.15×
EMP - 00.03
TOTAL - 00.10×
*EXCLUDING ANCHOR

Very poor response day-1

Parag GMP 7.50 - 8.50

Boa of tcl out or not

What are the subscription figures for today?

Fair Listing Gains are expected

As an investor avoid this IPO.

One can apply for listing gains. As chances of getting allotment depends on subscriptions, better to have Heritage Foods in Portfolio. Analysis covered on my site (Chk archives) and subscribe with your email for future updates...!!

Dear All,
we are in dilemma as to apply or not ? even ICICI has recommended to subscribe . but we are looking to listing gain broader please advice .