Kedaara Capital invests in ice cream brand Dairy Day

Kedaara Capital has announced a significant investment in Dairy Classic Ice Creams Private Limited (Dairy Day), a prominent ice cream and frozen dessert brand based in South India. The investment facilitates a complete exit for Motilal Oswal Private Equity-managed fund and other angel investors from the ice cream company.

Motilal Oswal Private Equity-managed India Business Excellence Fund invested ₹110 crore in the Bengaluru firm in 2016 for a minority stake. According to details from Tracxn until March 17, 2024, Dairy Day had raised $16.6 million from one institutional investor and 21 angel investors across three funding rounds. Of this, according to Tracxn, $16.5 million was invested by Motilal Oswal PE-backed fund.

Headquartered in Bengaluru, Dairy Day, set up in 2002, has solidified its presence across Karnataka, Tamil Nadu, Andhra Pradesh, and Telangana, boasting a network of over 50,000 retailers. It entered Maharashtra only last month, and the company's website shows it is also present in Odisha.

The company said it is poised to expand its production capacity by adding 1.5 lakh litres per day to its existing 2 lakh litres per day capacity, reflecting a robust growth trajectory with a 30% compound annual growth rate (CAGR) over the last decade.

Kedaara Capital said in a release the company would collaborate closely with Dairy Day's promoters, Managing Director and CEO MN Jaganath and Director (Technical) A Balaraju, along with the management team, to fuel the dairy firm's next phase of growth.

Jaganath and Balaraju, in a statement, said: "Kedaara's wealth of expertise and in-depth retail and consumer experience will be invaluable as we expedite our growth. We are confident of setting up world-class production facilities in various locations in the coming years."

Sunish Sharma, Founder and Managing Partner and Anant Gupta, Managing Director of Kedaara Capital, highlighted the rapid growth of the ice cream segment within the food and beverage industry. "Dairy Day’s dedication to quality... has resonated deeply with consumers across its target markets, propelling the brand to a market-leading position," they said while praising Dairy Day's dedicated team as a driving force behind its success.

EY served as the exclusive investment banker for this transaction.