Today, the company's success in paneer and other milk products is fuelling a Rs 2,000 crore IPO plan. The Federal reports from Milky Mist's HQ in Perundurai
As India’s dairy market undergoes a transformation – transitioning from largely being an unorganised sector to a more structured one – with an increasing focus on premium products, the Tamil Nadu-based dairy brand Milky Mist appears to be positioning itself as a leader in this evolving landscape.
The company, known for its paneer and value-added dairy products, is all set to file its Draft Red Herring Prospectus (DRHP) in the coming weeks, aiming to raise ₹2,000 crore, at a valuation of approximately ₹20,000 crore.
Milky Mist tries to give paneer the same satisfying 'bite and feel' as meat or chicken. It aims at making paneer a viable protein substitute for vegetarians and flexitarians alike.
What's funny, and reflects the risk appetite of the company, is the fact that paneer was almost unheard of in Tamil Nadu around three decades ago. Milky Mist not only made the audacious business decision to produce paneer at an industrial scale, but also chose to do it in Tamil Nadu, right from its interiors.
First mover advantage
Milky Mist Chairman and Managing Director Satish Kumar, who started the business in 1991 at the age of 17, reflects on the company’s evolution from a modest paneer supplier to star hotels into one of India’s largest vertically integrated dairy producers.
“We started very small,” Kumar told The Federal in an exclusive interaction, during a visit to the company’s headquarters in Perundurai, about 80 km from Coimbatore.
“Paneer is a North Indian staple, but we scaled it up, successfully built a brand around it, and gained a first-mover advantage in the South,” Kumar shared.
Also read: Dairy brand Milky Mist raises Rs 880-cr, ONDC takes on delivery apps, and more
The company now operates one of the largest paneer manufacturing facilities in the country, with a daily production capacity of 60,000 kg. Over ₹2,000 crore have already been invested in building the infrastructure, which includes an end-to-end cold chain system and a 100 per cent company-owned logistics set.
Focus on paneer
Unlike many dairy players who rely on daily milk sales as a core revenue stream, Milky Mist has intentionally stayed away from the liquid milk market.
“Milk is milk,” Kumar said. “Anybody can do it. We wanted to focus on products where we can add value such as paneer, cheese, yogurt and ice-creams and products that require innovation, consistency, and quality at scale.”
Over ₹2,000 crore has been invested in building the infrastructure, which includes an end-to-end cold chain system and a 100 per cent company-owned logistics set.
The company’s flagship product, paneer, is engineered to offer consistent texture, chewiness, and taste, with Kumar noting that the company worked with German firms to customise equipment and processes.
“Our goal is to give paneer the same satisfying bite and feel as meat or chicken,” he said, underlining a strategy aimed at making paneer a viable protein substitute for vegetarians and flexitarians alike.
As the company readies its IPO, the fresh capital is intended to fuel expansion and deepen its market penetration. “We are growing 20-30 per cent year-on-year,” said Kumar.
“We are poised for aggressive growth in the coming years, with supply chain management as a core strength,” he pointed out.
Also read: Amul is world's strongest food brand, dairy brand: UK's Brand Finance ranking
Chief Executive Officer K Rathnam, who joined Milky Mist after spending more than two decades with Amul, India's largest dairy brand, said the journey to scale paneer consumption in the south hasn’t been easy.
“Paneer was virtually unheard of in South Indian diets in the 1990s,” he noted. “It took years to educate consumers. North Indians knew the product, but others had to be introduced to it,” explained Rathnam.
Move to premium products
The company initially built its base in the hotel and restaurant (HoReCa) segment before moving into retail and modern trade.
Today, Milky Mist serves more than 20 countries, though exports still account for only about five per cent of its revenue. “The product is well accepted among the Indian diaspora, particularly in Europe, the UK, Singapore, and GCC nations,” said Rathnam.
Unlike many dairy players who rely on daily milk sales as a core revenue stream, Milky Mist has intentionally stayed away from the liquid milk market.
Noting a broader industry shift towards premiumisation, Milky Mist has decided to capitalise on this trend with products such as Greek-style yogurt, protein-rich milkshakes, and artisan cheeses.
“Post-COVID, there is far more focus on health and nutrition,” he said, pointing out that consumers are willing to pay more for functional, clean-label, and nutrient-dense foods.
Strategic partnership
A key part of the company’s quality play is its strategic partnership with MilkLane, a dairy supply chain start-up that sources high-quality milk from farmers.
Also read: Karnataka hikes milk price by ₹4 per litre from April 1; move to benefit farmers
“Rather than being just a supplier-buyer relationship, we formed a deeper partnership,” said Ratnam. “Good milk matters for all our premium products,” he added.
Despite a potentially volatile market environment, the leadership team remains confident about the IPO’s timing. “This is not a recent decision,” said Kumar, adding that they have been preparing for a long time.
'India remains core market'
The company aims to deepen its domestic footprint as well. “We are a consumption-driven economy with 1.4 billion people. Meeting local demand is a massive opportunity in itself,” Rathnam said. “Export helps with brand awareness, but India remains the core market,” he asserted.
Replying to a question whether Milky Mist aspires to become a global brand like Danone, Rathnam said, “In Europe, growth is limited by population. It is here in India that consumption is growing fast. We meet the domestic opportunity first and global ambitions can follow.”
