Desi Farms India Ltd is diversifying into the dairy sector by acquiring SNA Milk and Milk Products Limited for ₹37.88 crore through a share swap. This move aims to leverage existing infrastructure and boost consolidated revenues.
Desi Farms India Acquires Dairy Business for ₹37.88 Crore
Desi Farms India Ltd will issue 28,06,200 CCPS worth ₹37.88 crore to acquire SNA Milk and Milk Products Limited.
Reader Takeaway: Diversification into dairy sector; monitor integration and related party transaction governance.
What just happened
Desi Farms India Ltd has announced the acquisition of SNA Milk and Milk Products Limited for ₹37.88 crore. The consideration is being paid through a share swap, involving the issuance of 28,06,200 Compulsorily Convertible Preference Shares (CCPS).
Why this matters
This strategic move marks Desi Farms India Ltd's diversification from its core logistics business into the stable, consumption-driven dairy products and ice cream sector. The company aims to utilize existing infrastructure more efficiently and improve consolidated revenues.
The backstory
SNA Milk and Milk Products Limited has shown consistent revenue growth, with turnover rising from ₹17.91 crore in FY 2022-23 to ₹33.74 crore in FY 2024-25. This acquisition is part of Desi Farms India Ltd's approved strategic expansion plan.
What changes now
Desi Farms India Ltd will integrate the dairy business into its operations. The management intends to achieve a 100% acquisition of SNA Milk and Milk Products Limited. The company expects operational synergies and improved consolidated revenues.
Risks to watch
This transaction is classified as a Related Party Transaction, as Mr. Sunil Kumar Shahi, a promoter of Desi Farms India Ltd, is also a director/shareholder in SNA Milk and Milk Products Limited. Investors should closely monitor the governance aspects of this deal and potential equity dilution from the CCPS issuance.
Peer comparison
While specific dairy sector peers for Desi Farms India Ltd are not detailed in the filing, the company is entering a stable, consumption-driven market. Competitors in the dairy and ice cream segment include major national and regional players.
Context metrics (time-bound)
SNA Milk and Milk Products Limited's turnover grew from ₹17.91 crore in FY 2022-23 to ₹20.12 crore in FY 2023-24, and is projected to reach ₹33.74 crore in FY 2024-25.
What to track next
Investors should track the progress of the 100% acquisition completion, the integration of SNA Milk and Milk Products Limited's operations, and the financial performance of the new dairy segment. Monitoring the governance surrounding the related party transaction will also be crucial.