Promoters of Parag Milk Foods Ltd, which offers the Go brand of cheese and other products, are looking to further raise their stake in the company to 51% in the next few months, according to a report.
The plan will see the promoters purchase around 4.2 million shares of the Mumbai-based company from the open market in the next few quarters, Business Standard reported.
Based on the previous close of Rs 145.60 per share, the promoters would have to pay around Rs 60 crore ($8.4 million at current exchange rate) for nearly 4.2 million shares.
The news comes after Parag Milk chairman and promoter Devendra Shah purchased 200,000 shares of the company from the market on November 15. At that day’s close of Rs 126.75 on the BSE, Shah paid around Rs 2.53 crore for the shares.
As of September 30, the promoters had a total shareholding of 46% in the company.
Shares of Parag Milk were trading 1.44% up at Rs 147.70 apiece at the time of writing this report. VCCircle has reached out to the company on the details of this development and will update this report accordingly.
The promoters had pledged 36% of their overall shareholding to lenders, of which 31% has been freed after debt repayment, according to the Business Standard report. Shah said that the promoter group was looking to bring down their pledged shares by 20% over the coming quarters.
Founded in 1992, Parag Milk has facilities in locations including Maharashtra’s Manchar, Andhra Pradesh’s Palamaner and Haryana’s Sonipat.
According to its website, the company services over 15 consumer-centric product categories through brands including Gowardhan ghee, farm-to-home milk brand Pride of Cows and flavoured milk brand Topp Up.
In 2012, IDFC Alternatives invested Rs 155 crore (around $29 million then) in Parag Milk, making it the largest-ever deal in the Indian dairy space then. Parag Milk is now backed by global alternative investment products manager Investcorp, which acquired IDFC Alternatives’ PE and real estate management businesses in January this year.
PremjiInvest, the family office of Wipro's Azim Premji, is a small shareholder in Parag Milk.
The dairy firm made its stock market debut in 2016 after the sovereign wealth funds of Norway and Abu Dhabi joined its pool of anchor investors. Parag Milk had last year acquired French food giant Danone's Indian facility for Rs 30 crore ($4.6 million).
In July this year, it appointed Venkat Shankar as its new chief executive officer. Prior to that, Shankar had been working as a vice-president and head of the dairy business at Parag Milk’s listed peer Britannia Industries Ltd.