Hatsun Agro Product Limited (HAP), a leading dairy manufacturer, has announced the acquisition of 100% share capital in Milk Mantra for ₹233 crores ($27.5 million).
The move will enhance HAP’s footprint in the Eastern India dairy market, particularly in Odisha, where Milk Mantra’s popular brand ‘Milky Moo’ has a strong presence, according to a stock exchange filing.
The company will execute the acquisition through Share Purchase Agreements (SPAs) and other transaction documents with Milk Mantra’s promoters and shareholders. Once completed, Milk Mantra will operate as a wholly-owned subsidiary of HAP.
Milk Mantra, founded in 2009, has raised approximately $35 million from investors, including Aavishkaar Venture Capital, Fidelity Growth Partners, Neev Fund, Eight Roads Ventures, and the U.S.-based DFC. The company offers a variety of products, such as milk, curd, cottage cheese, buttermilk, and cattle feed.
This transaction appears to be a slump sale, given that Milk Mantra reported operating revenue of ₹276.42 crore in FY24, compared to the acquisition cost of ₹233 crores. Despite recording a profit of ₹9.78 crores in the last fiscal year, the Bhubaneswar-based company’s revenue has remained relatively flat over the past three years.
Milky Mist, a prominent player in the D2C dairy sector, reported revenues of ₹1,907.21 crores in FY24, solidifying its position as one of the industry leaders. According to media reports, the company plans an initial public offering (IPO) this year, aiming to raise around ₹2,000 crores through the listing.
Milk Mantra faces competition from emerging brands such as Country Delight, Akshayakalpa, and Sid’s Farm.
The struggles of Milk Mantra can be summed up as a “grow or die” scenario, as the company failed to break out of stagnation, leading to its sales at a valuation of less than 1x its sales despite being profitable. This situation also highlights the heavy reliance on liquid milk in its product mix, where margins remain tight unless one ventures into niche options like A2 milk or similar innovations.
For Chennai-based Hatsun Agro, the acquisition presents a strategically valuable addition to its portfolio, significantly enhancing its presence in the Eastern Indian market at a reasonable cost. This acquisition also explains the muted response in Hatsun’s stock price following the announcement.