Homegrown private equity fund Kedaara Capital on Thursday announced an undisclosed investment in Dairy Classic Ice Creams Pvt Ltd, operator of Dairy Day ice cream brand, which has presence primarily in South India.
VCCircle was first to report last month that Kedaara Capital was set to pick up majority stake in the firm, and in the process would provide exit to company's early institutional backer Motilal Oswal Private Equity.
Besides MOPE, a few angel investors also exited their investments in the firm, as per the release.
Given the convergence of values and aspirations, the company is confident Kedaara will help it deliver on the vision to make Dairy Day one of India’s most loved ice-cream brands, said M.N. Jaganath, MD and CEO and A. Balaraju, director – technical.
Launched in 2002 by former Unilever executive Balaraju, Dairy Day claims to manufacture and supply over 150 products across a variety of formats with over 30 flavours. The company's sole manufacturing facility is based in Karnataka, spread across an area of over 2 lakh square feet.
Dairy Day will soon be adding production capacity of 150,000 litres per day to its existing per day capacity of 200,000 litres, and claims to have achieved a 30% compounded annual growth rate (CAGR) for its revenue over the last decade.
Dairy Day, headquartered in Bengaluru, has established a strong presence in Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, and Maharashtra with over 50,000 retailers.
"Ice Cream is one of the fastest growing categories within the entire food & beverage segment. Dairy Day’s dedication to quality, and its commitment to delivering “goodness” has resonated deeply with consumers across its target markets, propelling the brand to a market-leading position," said Sunish Sharma, founder and managing partner and Anant Gupta, MD of Kedaara Capital.
Dairy Day not just turned profitable during FY23 but also grew its topline by over 80%. It posted net sales of Rs 439 crore during FY23 as against Rs 239 crore a year before, as per VCCEdge, the data intelligence platform of VCCircle. The company also registered a profit of over Rs 19 crore during the period under review.
Besides popular brands such as Amul and Mother Dairy, regional players that populate the domestic ice cream market include Arun Icecreams and Havmor. International brands such as Baskin-Robbins, Häagen-Dazs and London Dairy have also marked their presence in the country.
However, the space hasn’t seen too many deals in the recent past. In May last year, Singapore’s Jungle Ventures had led a $11 million round of funding in Pune-based ice cream brand NIC.
Interestingly, the Chona family, who ran the Havmor Ice Cream and before selling it to South Korean conglomerate Lotte, recently re-entered the segment and even roped in an early-stage investment firm as its backer.