Milky Mist IPO opens today: Should investors apply?

The Milky Mist Dairy Food IPO opened for subscription today, August 11, and investors can bid for the issue until August 13. The dairy company is looking to raise Rs 1,553 crore through the public issue, which comes at a time when demand for packaged and value-added dairy products is growing in India.But should investors apply for the IPO? While the company has an established brand and a wide product portfolio, investors will also need to look at its debt, expansion plans and the valuation at which the shares are being offered.MILKY MIST IPO: KEY DETAILSThe IPO has a price band of Rs 133 to Rs 140 per share. The minimum lot size is 107 shares, which means retail investors will need at least Rs 14,980 to apply at the upper end of the price band.The issue comprises a fresh issue of 10.20 crore shares worth Rs 1,428 crore and an offer for sale of 0.89 crore shares worth Rs 125 crore. The shares are proposed to be listed on both the NSE and BSE, with the tentative listing date set for August 18. The IPO allotment is expected to be finalised on August 14.WHAT WILL MILKY MIST DO WITH THE IPO MONEY?A large part of the fresh issue proceeds will be used to reduce the company's debt. Milky Mist plans to use around Rs 496.86 crore to repay or prepay certain borrowings. Another Rs 469.24 crore will go towards capital expenditure for the expansion and modernisation of its manufacturing facility at Perundurai. The company also plans to spend around Rs 155.31 crore on visi coolers, ice cream freezers and chocolate coolers. The remaining funds will be used for general corporate purposes.The use of a significant portion of the IPO proceeds for debt reduction could be viewed positively by investors, as lower borrowings can help reduce the company's interest burden over time.WHAT DOES MILKY MIST'S BUSINESS LOOK LIKE?Milky Mist Dairy Food was incorporated in 2014 and has built its business around value-added dairy products. Its portfolio includes cheese, paneer, butter, curd, ghee, yoghurt, ice cream, UHT products and frozen foods.The company has also expanded into ready-to-eat, ready-to-cook products and chocolates. Its products are sold under the Milky Mist brand as well as brands such as SmartChef, Capella, Misty Lite, Briyas and Asal.One of the company's key strengths is its integrated business model. It sources milk directly from farmers and processes it through its manufacturing facilities before distributing products through its own cold-chain network and other channels.This gives the company greater control over sourcing, production and distribution. However, the dairy and packaged food market is highly competitive, with both established players and newer brands fighting for market share.GMP POINTS TO A POSITIVE LISTINGThe grey market premium, or GMP, is also giving some indication of investor interest ahead of the listing.As of August 11, the latest GMP was Rs 20.50. At the upper price band of Rs 140, this suggests an estimated listing price of around Rs 160.50, implying a potential gain of about 14.6% over the issue price.However, investors should not treat GMP as a guaranteed return. Grey market prices are unofficial and can change quickly depending on market sentiment and subscription levels.SO, SHOULD INVESTORS APPLY?Milky Mist has several factors working in its favour. It operates in the growing value-added dairy segment, has a diversified product portfolio and has established a presence across India. The planned investment in manufacturing capacity could also support future growth.The use of IPO proceeds to reduce debt is another positive factor. At the same time, investors should not look at the GMP alone while making an investment decision. The company's financial performance, valuation, competition and ability to generate sustainable profits are equally important.For investors who are comfortable with the risks associated with IPOs and have a long-term view, Milky Mist could be worth considering. Those looking purely for listing gains, however, should be cautious, as the GMP can change before the shares actually list.The IPO is open from August 11 to August 13, giving investors three days to decide whether the company's growth prospects justify the asking price.- EndsPublished By: Jasmine anandPublished On: Aug 11, 2026 12:13 IST