Motilal Oswal Private Equity invests Rs 110 crore in Dairy Classic

Bengaluru-based Dairy Classic will use funds for capacity expansion in Tamil Nadu and Karnataka

Motilal Oswal Private Equity Advisors Pvt Ltd (MOPE) has announced that its India Business Excellence Fund-II and India Business Excellence Fund-IIA have invested Rs 110 crore for a minority stake in Dairy Classic Ice Creams Pvt Ltd (Dairy Day), a Bengaluru-based company engaged in the business of manufacturing and selling ice creams and frozen desserts.

This is the first round of private equity investment in the company.

"The funds will be used for capacity expansion in Tamil Nadu and Karnataka, deepening the distribution network and brand-building, which will help the company serve its customers better and create value for all stakeholders," the company said.

Established in 2003, Dairy Day is one of the top five ice cream brands in South India and has a strong presence in Karnataka and Tamil Nadu.

The company operates through a supply chain network, with more than 15,000 retailers in these regions.

The company has a centralised manufacturing facility near Bengaluru and offers a product basket of ice creams and frozen desserts.

Vishal Tulsyan, managing director and CEO of MOPE, said that "we believe that the company is well positioned to benefit from increasing acceptance of ice cream as dessert, heightened brand awareness, higher spending capabilities and improving refrigeration infrastructure. Dairy Classic is a fairly young company and the management has shown exceptional execution capabilities by scaling the brand where it is today, in such a short time span."

M N Jagannath and A Balaraju, directors of Dairy Classic, said, "Partnering with Motilal Oswal Private Equity will help Dairy Day to achieve its multi-pronged goal of becoming one of the leading ice cream brands in Southern India while continually improving its market share. We strongly believe that MOPE is one of the premier private equity fund managers in India. Their experience of managing several companies across sectors will bring a lot of value to us as we endeavour to build an excellent organisation."

Ernst & Young acted as the exclusive financial advisor to Dairy Classic for this transaction.