India: TPG Growth’s Rise Fund makes first investment, puts in $50m in Dodla Dairy

David Bonderman, Co-Founder of TPG Capital. Photographer: Andrew Harrer/Bloomberg

By Ishita Russell

May 4, 2017

TPG Growth, the growth-capital fund of US private equity firm TPG, has invested $50 million in Hyderabad-based Dodla Dairy through the Rise Fund, its global social impact fund, according to a report in The Economic Times.

While the quantum of the stake acquired by TPG was not mentioned,  a recent report by Mint had said that TPG was close to acquiring a stake of about 25 per cent held by US-based investment firm Proterra Investment Partners (formerly Black River Asset Management) in a deal worth Rs300 crore ($47 million).

Black River had acquired the stake in Dodla Dairy for Rs110 crore in 2012.

“The deal involves largely a secondary component. We will own significant minority stake in the company post the deal,” Vish Narain, a partner at TPG Growth, told The Economic Times.

This funding marks the Rise Fund’s first investment in India after the $2 billion fund was set up in December.

US-based investment firm Proterra Investment Partners was looking at selling its 23 per cent stake in Dodla Dairy and had mandated investment bank Edelweiss to look for a buyer.

It was also reported that Tata Opportunities Fund, a private equity (PE) fund owned by the Tata group, was also a strong contender for the deal, along with Temasek and Kedaara Capital.

Founded in 1998, Dodla Dairy procures, processes and sells milk and milk products across south India and Maharashtra, Madhya Pradesh, Rajasthan, Gujarat and West Bengal.  According to the company website, it sells about 900,000 litres of milk and six tonnes of milk products every day through more than 50,000 outlets.

Dairy firms have recently seen tremendous interest from investors. Recently, Odisha-based Milk Mantra Dairy Pvt. Ltd raised an undisclosed amount in a Series D funding round led by Neev Fund, along with co-investment from existing investors Eight Roads Ventures and Aavishkaar. Last year, Bengaluru-based Dairy Classic Ice Creams Pvt. Ltd raised about Rs110 crore from Motilal Oswal Private Equity Investment Advisors.

Also Read:

India: PE firm TPG Growth to acquire 25% stake in Dodla Dairy

India: Tata fund in talks to buy 23% stake in Dodla Dairy

India: US fund Proterra Investment in talks to sell its 23% stake in Dodla Dairy

Why TPG’s Rise Fund could redefine impact investing

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