Dairy startup Osam raises Series B round from Lok Capital, Aavishkaar
HR Food Processing Pvt. Ltd, which manufactures and markets dairy products under the brand name Osam, has raised Rs 45 crore (around $6.7 million) in its Series B round of funding, it said in a statement.
The round was led by Lok Capital-advised Growth Catalyst Partners. The Ranchi-based company will use the funds to expand its production capacity and enhance its distribution outreach into neighbouring districts in Jharkhand and Bihar. HR Food’s existing investor Aavishkaar also participated in this round.
Shah said the capital will also help the firm grow inorganically. The dairy firm, which has already acquired another dairy plant in Jharkhand, is looking at other acquisitions to capture a significant share of Eastern India’s dairy market.
India is the world’s largest producer of milk but the country’s dairy market is highly fragmented and is dominated by local milkmen, regional brands and milk cooperative Amul. The sector has attracted several investors in the recent years, and has also seen consolidation moves.
French giant Groupe Lactalis SA recently bought the milk products business of Mumbai-listed Anik Industries Ltd for Rs 470 crore ($70 million) in its second acquisition in India in as many years. The deal helped Lactalis go neck and neck with India’s top private dairy firm Hatsun Agro Product Ltd in terms of revenue.
Lactalis had also acquired India’s second-largest private dairy firm Tirumala Milk Products Pvt. Ltd two years ago from private equity firm Carlyle and its promoters in a big-ticket deal.
Milk production and consumption are growing at a fast clip in India, making the country an attractive market for not just global dairy firms but other investors as well. Dairy companies such as Prabhat Dairy, Parag Milk and Dodla Dairy have raised private equity funding. Prabhat Dairy made its debut on bourses last year and Parag Milk went public this year,
although their initial share sales struggled to attract investors.