Motilal Oswal PE invests Rs110 crore in Dairy Classic Ice Creams

Mumbai: Motilal Oswal Private Equity-managed India Business Excellence Fund has invested Rs.110 crore in Bengaluru-based Dairy Classic Ice Creams Pvt. Ltd, which is engaged in the business of manufacturing and selling of ice creams and frozen desserts, for a minority stake, as per a press release.

The capital raised would be utilized for capacity expansion in Tamil Nadu and Karnataka, deepening the distribution network and brand building, said M.N. Jagannath and A. Balaraju, directors of Dairy Classic. This is the first round of private equity investment in the company.

Founded in 2003, Dairy Day has a strong presence in Karnataka and Tamil Nadu and operates through a very strong supply chain network, with more than 15,000 retailers in these regions.

The company has a centralized, state-of-the-art manufacturing facility near Bengaluru and offers a complete product basket of ice creams and frozen desserts.

“Partnering with Motilal Oswal Private Equity will help Dairy Day to achieve its multi-pronged goals of becoming one of the leading ice cream brands in the Southern India while continually improving its market share. We strongly believe that MOPE is one of the premier private equity fund managers in India. Their experience of managing several companies across sectors will bring a lot of value to us as we endeavor to build an excellent organization,” added M. N. Jagannath and A. Balaraju.

EY (Ernst & Young) acted as an exclusive financial advisor to Dairy Classic for this transaction.

The Mumbai-based alternate asset manager MOPE has raised two growth capital funds [India Business Excellence Fund-I (IBEF-I) and India Business Excellence Fund-II. While, it had raised its maiden fund IBEF-I of $125 million in 2007-08 and another $155 million fund it raised three years ago.

The first fund has already made investments in 13 companies till date. Of these 13 companies, four are listed on the Indian stock exchanges while others are in the private domain. The fund is fully deployed. Some of the investments include BPO firm Effort BPO Ltd, material handling equipment manufacturer Electro Mech and transformer maker IMP Powers Ltd.

According to a 21 July investor presentation by Motilal Oswal Financial Services Ltd, IBEF I has seen four full exits and four partial exits translating into approximately 198% capital returned (in rupees) to its investors.

The second fund has already made four investments till date and aims to invest the corpus in 10-13 companies over the next three years, as per the information available on its website.

The capital raised by Dairy Classic Ice Creams will be utilized for capacity expansion in Tamil Nadu and Karnataka