KKR backs Kwality Ltd.; commits upto Rs 520 crore towards expansion plans

Kwality Ltd, India’s largest and fastest growing private dairy company, has received capital commitment of upto Rs 520 crore via structured finance from KKR India, one of the biggest PE fund, to fuel its aggressive growth plans as the company continues to rapidly shift its business model towards B2C/retail segment. ICICI Securities PD Ltd. is the financial advisor to the transaction.
The proceeds shall be utilized to fund Capex to further strengthen milk procurement infrastructure solely for high-margin value-added product categories including cheese, paneer, table butters, tetra-packs, flavoured milk and yoghurt among others.
The company intends to roll out a series of such products in the near future. Additionally, funds will be deployed for part repayment of debt to improve cash flows and augment brand building activities.
Kwality has engaged reputed advertising and marketing firms for its brand building initiatives, namely McCann for creative, Zenith Optimedia for media planning, and Digital Quotient for social media. The company has signed Bollywood actor, Akshay Kumar, as its brand ambassador. Additionally, the company has roped in Ernst and Young (E&Y) as its IT transformation partner.
Commenting on the development, MD, Kwality Ltd, Sanjay Dhingra said, “It gives us immense confidence that KKR has believed in our growth story and is backing our expansion plans. We are in a critical stage of growth where we are shifting our business model from B2B to B2C, which encompasses revamp of all business functions across the value chain including procurement, product mix shift to cater to evolving needs of customers ensuring high quality, brand building, extensive distribution network to ensure product availability and boost retail presence, robust IT infrastructure for process integration and strong managerial competencies.”
He further added, “This investment would support a giant leap in this direction enabling faster growth and achieving high profitability. Further, I believe KKR’s strong pedigree and rich experience combined with our management capabilities is going to unlock significant value and will benefit all stakeholders”.