In a significant move into the ice cream industry, Kedaara Capital has announced its inaugural investment in Dairy Classic Ice Creams Pvt Ltd, commonly known as Dairy Day, marking the private equity firm’s first foray into this sector. The deal’s exact magnitude remains undisclosed but is estimated to be approximately $150 million, ranking it among the largest private equity investments in the ice cream domain, as per sources familiar with the matter.
This investment follows closely on the heels of a $20 million follow-up investment by venture capital firm Jungle Ventures in Walko Food, which houses popular ice cream brands like NIC and Grameen Kulfi. Additionally, global consumer giant Unilever recently revealed its decision to divest its ice cream business, encompassing renowned brands such as Magnum and Ben & Jerry’s, as part of cost-cutting measures.
“Ice cream stands out as one of the fastest-growing segments within the broader food & beverage landscape,” remarked Sunish Sharma, Managing Partner at Kedaara. EY played a pivotal role as the exclusive investment banker facilitating this transaction.
Kedaara Capital has articulated that this investment will not only bolster Dairy Day’s strategic vision but also facilitate a complete exit for Motilal Oswal Private Equity and other angel investors. The firm expressed its intent to collaborate closely with Dairy Day’s promoters, MN Jaganath and A Balaraju, as well as the company’s management team.
MN Jaganath, Managing Director of Dairy Day, expressed confidence in the partnership with Kedaara, highlighting the invaluable expertise and profound retail and consumer experience that the firm brings to the table. He emphasized the company’s commitment to establishing world-class production facilities across various locations in the near future.
Established in 2002 and headquartered in Bengaluru, Dairy Day boasts an extensive network of over 50,000 retailers across key regions such as Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, and Maharashtra. With a compounded annual growth rate (CAGR) of 30% over the past decade, the company is poised for further expansion, aiming to elevate its daily production capacity from 2 lakh litres to 3.5 lakh litres. Dairy Day offers a diverse range of products, including candies, sorbet, cones, and tubs, distributed across general trade, modern trade, and online channels.
