Kwality, India's largest privately owned dairy firm, is about to raise ₹600 crore from the American private equity giant Kohlberg Kravis Roberts & Co. (KKR), Reghu Balakrishnan of Mint reported citing sources.
The investment will be in the form of a structured debt deal and will help Qwality expand its retail presence and refinance its loans, according to the report. KKR's ownership stake in the company is unclear; the firm also invests in companies through debt.
Qwality operates out of New Delhi and makes milk-based products such as ghee, flavoured milk, butter and cheese that are sold under the ‘Dairy Best’ brand. It is partly owned by the Dhingra family, which bought into the company in 2002. The company has been trying to diversify beyond its strong business-to-business (B2B) focus, into the value-added, retail sales-oriented areas, according to media reports.
Kwality has a large milk supply business and currently earns a majority of its revenue from selling products and supplying milk to companies such as Hindustan Unilever, Britannia Industries, and Mother Dairy.
It has previously said it plans to invest ₹500 crore to increases the share of retail sales in its overall sales from 30 percent to 70 percent in three years. Kwality posted net sales of ₹5724.10 crore in fiscal 2016, up by 8.66% from the previous year.
KKR has experience investing in dairy companies. In 2014, it sold its remaining shares in China Modern Dairy after a six-year investment.
In all, the private equity firm has invested over US$3 billion in India. Mint reported earlier that the firm is in the middle of raising its second credit fund, which will be worth ₹1,500 crore.
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