Kwality Ltd, India’s largest and fastest growing private dairy company, has received capital commitment of upto Rs 520 crore via structured finance from KKR India, one of the biggest PE fund. The funds raised will utilised by the company to fuel its aggressive growth plans as it looks to rapidly shift its business model towards B2C/retail segment.
ICICI Securities PD Ltd is the financial advisor to the transaction.
The proceeds shall be utilised to fund the capital expenditure to further strengthen milk procurement infrastructure solely for high-margin Value-Added Product categories including Cheese, Paneer, Table Butters, Tetra-Packs, flavoured milk and yoghurt among others. The company intends to roll out a series of such products in the near future. Additionally, funds will be deployed for part repayment of debt to improve cash flows and augment brand building activities.
“We are in a critical stage of growth where we are shifting our business model from B2B to B2C, which encompasses revamp of all business functions across the value chain including procurement, product mix shift to cater to evolving needs of customers ensuring high quality, brand building, extensive distribution network to ensure product availability and boost retail presence, robust IT infrastructure for process integration and strong managerial competencies. This investment would support a giant leap in this direction enabling faster growth and achieving high profitability,” says Sanjay Dhingra, MD, Kwality Ltd, in a statement.
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This is KKR's first investment in a dairy firm in india. "We believe that Kwality is well positioned to shape the future of the dairy industry in India and holds immense potential to deliver to all its stakeholders. We are confident of the business strategy employed by Kwality to expand its footprints in the retail dairy segment and are positive that the company is on track to become a prominent player in the B2C category in a short span of time," says Sanjay Nayar, CEO, KKR India.