Actis & Apax in talks with Dinshaw Dairy Foods for 2,000 crore value

Dinshaw Dairy Foods Ltd., India's oldest ice-cream companies, is on the block and the promoters of the 82-year-old Nagpur-based firm are in talks with private equity funds Actis and Apax Partners and other strategic investors, reported ET.

The promoters of the company, which is a part of the Bapuna Group, are said to be seeking a valuation of Rs 2,000 crore and appointed investment bank Moelis and Company as advisor.

"Actis and Apax Partners are carrying out due diligence and there are a couple of other consumer companies that, too, have evinced interest," said an investment banker with knowledge of the development.

"At present, a majority sale is being considered, but the owners are ready to exit at a lucrative valuation", he said. Another banker said succession issues and management differences among the promoters could be why the dairy company is up for sale. The reason for the sale could not be confirmed. Aspi Bapuna, chairman of the Bapuna Group, said an exercise is under way to ascertain brand value of Dinshaw's.

"We have not yet taken any decision," he said, adding that the brand's value exceeds Rs 2,300 crore.

Sam and Jimmy Rana, the sons of the founder-brothers Dinshaw and Erachshaw Rana, respectively, merged the company with Nagpur-based distillery group Bapuna in 2002. The group owns a 50 per cent stake in the company.

"In recent years, India's dairy market has generated significant amount of interest among private equity as well as strategic investors. We have also witnessed a significant number of international dairy players looking to invest in the country," said Nishesh Dalal, partner, deal advisory, at KPMG in India.

According to Dalal, dairy is predominantly a regional business with the exception of a few national and multinational private companies that have created a nationwide network.