Parag Milk Foods Ltd IPO Message Board (Page 27)

Any buyer in Ahmedabad

With 2 existing investors (motilal and IDFC) as bankers to the issue...with both these investors selling...motilal pe and IDFC pe are selling...their banking outfits will have a tendency to price the issue tightly leaving nothing for retail...

Add to this the fact that one of the bankers walked out of the issue due to diligence concerns...

Anchor list also does not have typical domestic MF''s like hdfc, reliance, icici, etc...so not great...

Clear Avoid!

Analysts bullish on Parag Milk.

http://www.moneycontrol.com/news/ipo-issues-open/cash-cow-analysts-bullishparag-milk-foods-ipo_6518841.html

Parag GMP 10.50 - 11.50

Value‐added products fetch around 57 percent revenues to for the integrated dairy player. It has a pan-India network comprising of 15 depots, 104 super stockists and over 3,000 distributors. The company has a wholly owned subsidiary Bhagyalaxmi Dairy Farm, which is a fully automated cow farm, housing over 2,000 Holstein breed cows delivering superior quality yields. The farm-to-home premium fresh milk is marketed and sold under the ‘Pride of Cows’ brand in Mumbai and Pune. Parag derives 57 percent of sales from value‐added products like Cheese, UHT Milk, Ghee, Whey products, Flavored milk, Buttermilk and other value‐added products. Prabhudas Lilladher says that value‐added products offer higher margins and profitability although it requires higher inventory levels than fresh products. Parag Milk Foods has largest cheese plant with 32 percent market share in India next only to Amul with a market share of 42 percent. About 12 percent of sales flow from B2B segment including hotels, restaurants and caterers. It supplies cheese to Domino''s, KFC and Pizza Hut. It has a robust milk procurement network with 3400 village level collection centers that are present in 29 districts across the states of Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu. It has built strong relationships with milk farmers through continuous engagement.

What about drought in Maharashtra

kya karu kya na karu ye kasi muskil hai ko to bata de iska hal mere bhai

who is anchor investor in PARAG Foods

This is so old data .. .and you are asking for it now ???

anyway. the Anchor Investors list .. is available here ...

http://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20160503-23

Septa sir ur view on shree pushkar chemicals has come to 120 levels ....

ICICI Direct report and Emkay report positive subscribe on Parag IPO

Here is Emkay report
Parag Milks IPO note issued by Emkay Global - Positive note.

Parag Dairy IPO (Issue date – 04/05/2016 to 06/05/2016) - Well-poised to play retail distribution space; fair valuations leaves limited listing gains
Summary
Parag dairy is the integrated farm company which has presence in entire value chain. It has a strong brand positioning across it target consumer with constant focus on value added products cheese, Whey protein, ghee, butter, Paneer etc. It has a 32% market share in cheese market with strong foothold in Institutional cheese business. We believe with Parag being in production and distribution of cow milk and all other products being vegetarian is positive for a company. However, we believe there is limited scope for upside given the expensive valuations (19x FY18 EPS) considering a subdued return ratios. From a longer perspective, lot would depend how its retail expansion pan out and whether it can maintain a higher margin trajectory and make the balance sheet leaner.
Background
Parag dairy is a leading manufacturers and marketers of dairy-based branded foods in India. Commenced 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. It houses brands like Gowardhan, Go, Topp up & Pride of Cows. Its aggregate milk processing capacity is 2mn ltr p.d and cheese plant has the largest production capacity in India, with a raw cheese production capacity of 40 MT p.d. The revenues have grown by 22% CAGR, while EBITDA & PAT have grown by 21% & 161% CAGR over FY11-FY15.
Parag brands and products along with their target consumer base
Brands
Products
Target consumer

Fresh milk in many variants, Curd products, Ghee, Paneer, Butter, Whey, Shrikhand, Gulab Jamun mix & milk powders
House-hold consumption

Cheese products, UHT milk, Fresh milk: Go Kidz, Curd: Fruit yoghurts in six flavours, Fresh cream and beverages
Children and the youth generation, primarily for direct consumption.

Flavoured milk in six flavours
Youth generation and travellers as a source of instant nourishment

Premium cow milk
Farm-to-home concept targeted at household consumers seeking premium quality cow‘s milk.

Sales break-up
FY14
FY15
9MFY16
Fresh Milk
21.2%
18.2%
20.3%
Ghee, butter & cream
19.0%
18.3%
28.5%
Cheese/Panner
18.5%
18.5%
18.7%
Skimmed milk powder
18.6%
20.9%
10.1%
UHT
2.3%
3.2%
4.8%
Whey products
2.0%
1.6%
2.9%
Management Background
Promoted by Mr. Devendra Shah, Chairman; Mr. Pritam Shah, Managing Director and Mr. Parag Shah, each of whom has over 20 years of experience in the milk and dairy based food business. Further, Mr. B. M. Vyas, former managing director of the Gujarat Cooperative Milk Marketing Federation (Amul) has been with Parag since 2010 as an advisor and is a Director on Board.

Key Positives/Rationale
§ Expand direct distribution reach is the key growth driver – In order to expand its retail reach, Parag has rapidly expanded its distribution network to 15 depots, 104 super stockists and 3,000+ distributors, which reaches to about 1.6mn direct outlets. As a part of its strategy to expand distribution, company plans to appoint additional distributors & super stockists and introduce newer SKUs at lower price points in Tier 3 & rural markets. Company also plans to expand its depot reach from 15 to 21 by FY17 (2 –North, 1-West, 1- South and 1-East). Increasing direct distribution and deepening the existing distributor will be the key to sustain revenue growth momentum.
§ Cheese is the money bagger for Parag – Parag is one of the largest manufacturers of cheese in the country has over 32% share in the cheese market (largely institutional – hotels, restaurants and caterers). Cheese accounts for 19% of the topline and has grown at 32% in FY15. Parag currently has a capacity of 40mt/day, which will be increased to 60mt/day in FY17. Expansion into cheese is in line with its strategy of focus on value added and higher margin products. While, Parag has a strong presence in the institutional segment (supplies to McCain Foods, Jubilant Foodworks, Yum Foods, Sam’s Pizza, MTR Foods, Mother Dairy, etc), the network expansion should improve retail share of cheese products as well.
§ Enhance Brand equity; key to drive retail operations – Parag sells its products under ‘Gowardhan’, ‘Go‘, ’Pride of Cows‘ and ‘Topp Up‘ brands, which are targeted at different products. Go is primarily focused on value added products like Cheese, yoghurt & UHT milk; Gowardhan targets value segment like Milk, ghee, curd & paneer; Topp Up is the brand for flavoured milk, while Pride of Cows is targeted at premium-end. Company has increased its advertising & brand spends from 1.2% of sales in FY14 to 2.1% in 9MFY16 (Rs 264mn) and it plans to increase ad & promotion spends. However, company stated that inclusive of promotions, it would spend 4-5% on ad & promotion spends. Company is focusing on expanding its revenues in ghee, milk & paneer through Gowardhan and cheese products & UTH through Go.
§ Adding new products & variants with focus on healthy & nutrition; margin accretive - Moving along the health & nutrition platform, company has added products like Topp Up (flavoured milk), T-star milk (tea & coffee) and Go Kids (milk with high protein). Going forward, company plans to add new variants in curd, cheese products, cream cheese (low fat), colostrum products, butter & ghee under Pride of Cows and retail branding of whey products. These products being value added products would add to the margin profile.
§ Robust revenue growth; addressing margins volatility – Parag has reported healthy revenue growth in last 3 years at 16.9% CAGR aided by milk, cheese and skimmed milk powder. However, owing to volatile milk prices and weaker mix, margins have fluctuated in the range of 7-8%. However, company has reduced revenues of low margin skimmed milk powder and is expanding share of value added products like cheese, UHT & whey, which are margin accretive. Company has improved EBITDA margins from 7.4% in FY15 to 8.7% in 9MFY16.
§ Integrated Business Model – ‘Farm to Home’ - Parag currently procures a significant portion of its milk requirement, directly from farmers in 29 districts across Maharashtra, Andhra Pradesh, Karnataka & Tamil Nadu. Along with a wide of products being manufactured at Manchar and Palamaner, it also has a good reach, wherein its products are distributed through 104 super stockists and 3,000+ distributors to retail and institutional customers. Company plans to add 75 new bulk milk coolers and 100 automated milk collection systems, which will be installed at under-penetrated villages, which will expand the milk procurement base.

Prabhat Dairy
Parag Milk
Heritage Foods
Hatsun Agro
Kwality Limited
Segment Mix
Processed Milk
24%
Milk
21%
Milk
81%
Milk
73%
Milk (includes bulk)
46%
Condensed Milk
28%
Milk Powder
10%
Curd
15%
Milk Products
17%
Milk Powder
29%

Angel Broking recommends investors to subscribe the issue for a longer term perspective. It believes that the company will continue to perform well on both the top-line and the bottom-line front considering the company has a diversified product basket, strong brands and wide distribution network. "At the upper end of the issue price band, the company is seeking a P/E multiple of 37.6x its 9MFY2016 annualised earnings, lower than its close peer Prabhat Dairy’s valuation, which is trading at a higher multiple of 49.8x its 9MFY2016 annualised earnings. Further, retail investors will be given a discount of Rs 12/share," it says in a report. The brokerage firm is optimistic that Parag Milks will benefit from an increase in the overall consumption of cheese in India as household penetration of cheese in the country is very low compared to other developed countries. KR Choksey also suggests subscribing the issue as it feels each of its brands is positioned to get premium pricing. With a subscribe recommendation, Philips Capital believes that its valuation is justified given the growth visibility, brand equity, innovations history, strong supply chain and capable management team. Though it feels that stock is slightly expensive to some peers but the higher valuation is justified by lower share of institutional sales, stronger brands, distribution reach, and strong execution history. "Lower RoE/RoCE for dairy players versus FMCG companies is compensated by 35 percent discount to FMCG sector multiple and higher growth and premiumisation prospects compared to penetrated FMCG categories," it says in a report.

@chivitra
Never invest money in MF on a single day. U may be caught in losses. If u dont understand market or dont hv time to track, better go for SIP Direct plan.
Else u may invest small amount on irregular interval, as suggested by septa sir.
But how could u determine , this is the right time to invest.
Long term Average of Indian market , for PE multiple is 18-19. If it is below 19 PE , u may invest in MF otherwise wait for correction. U would get the chance for lower PE multiple of Market.
Market hv some more lower side due to awaiting poor results of banks focused on corporate loans.
I m right septa sir.

Agree 100%

Dear Eagleye,

What is the current Grey Market premium of
Thyrocare
Ujjivan
Parag

Is there any kostak for parag milk , please reply immediately.
Thanks

PARAG MILK FOODS LTD.
RAJKOT GRAY MARKET PREMIUM PER 1 RETAIL APPLICATION RS. 300

AVOID AVOID 700 Rs per applicetion in Ahmedabad

DOMESTIC MF LIKE HDFC RELIANCE NOT INVEST IN PARAG SO AVOID AVOID MAY BE LISTING AT DISCOUNT

Mid june !

Bengaluru headquartered business services provider Quess Corp which responded to SEBI’s request for clarifications on the company’s proposed Rs 400-crore initial public offering in March, has received the go-ahead from the capital market regulator. Quess Corp is co-owned by Thomas Cook (India), and is promoted by Fairfax Financial and Ajit Isaac. “We filed the DRHP (Draft Red Herring Prospectus) for our IPO with SEBI on February 2 and received a request from SEBI for the first set of clarifications in the first week of March, which we responded to later that month. We received SEBI approval for the IPO on April 26 and will go to the markets in mid-June,” Ajit Isaac, Chairman & MD, Quess Corp,

Post issue MarketCap will be Rs.4,000 Crs.

I mean ... with issue price of 317/- per share ... post issue MarketCap will be Rs.4000Crs. ... to be able to justify a Rs.400Crs Issue size representing 10% of free float

... That is how I deduced the issue price will be 317/-

Parag GMP 09-11
(slightly higher after the Anchor List)

The Anchor list is pathetic...there aren''t any of the usual names that one would expect to see in an Anchor list of an Indian Company...mostly new names...the usual suspects which understand the space and the lay of the land have chosen to stay away it seems...Domestic MF''''s are conspicuous by their absence...unless Anchor has strong Domestic MF participation...post listing price momentum will not be created...

CLEAR AVOID!

Motilal Oswal who is a PE investor and also BRLM to the issue is also conspicuous by the absence of its Mutual Fund arm from the Anchor list...!!!

Similarly for IDFC MF...

The Anchor Investors list is superlative! ... 16 out of the 17 anchor investors are Goras !!

Also, please note that, in case of Parag, the Anchor investors get 45% allocation of the issue size unlike the usual IPOs wherein it is 30% of the book size.

This is because Anchor book is 60% of the quota reserved for QIB, which in this case is 75% instead of 50% ... whereas the RII quota is only 10% instead of the usual 35%.

The Anchor list is pathetic...Domestic MF''s are conspicuous by their absence...unless Anchor has strong Domestic MF participation...post listing price momentum will not be created...

AVOID

Neotrade, I dont agree with your thought process. Anchor list is wow !

Khemka,egaleye@ me M.GUPTA.......REMEMBER EVRY BODY.....LOOOTED KUTTTTED

ABE MAI M.GUPTA HI HOON
LOOTED KUTTED,EVERY BUDDY S HERE FOR LOOOTED KOOOTED
I CHANGED MY SELF BY FOLLOWING THE GREAT EAGLEYE.....

@septa sir
In afternoon u told that lead manager fund house will be subscriber for this issue under Anchor list.
1 thing , i would like to clear that i m subscriber of Most Focused Multicap 35 funds through SIP since last 1 year. They r very professional in managing their MF business and will never subscribe such a low margin business, which is highly sensitive with their costing structure. Operating at only 2% NP margin. They hv growth vision for their MF portfolio , as said by Charles munger in berkshire investor Annual meet. Despite mandate for 35 stock holding , they are not holding more than 25 share. Same is with their 3 other plans.

Yes

Thanks for advise. Septa sir