In the early 1990s, on the outskirts of Erode in Tamil Nadu, a teenage school dropout made a decision that would eventually churn out one of India’s most compelling brand stories in the dairy sector.
T. Sathish Kumar, now at the helm of Milky Mist Dairy Food Ltd, was just 16 when he abandoned formal schooling to salvage his family’s struggling milk business. Back then, the venture faced an existential crisis, squeezed by wafer-thin margins, milk’s short shelf life, and distribution bottlenecks. What followed was a strategic shift that would not only revive the family’s fortunes but also set the course for building one of India’s fastest-growing dairy brands, without selling a drop of liquid milk.
Milky Mist is now preparing to hit the public markets with a Rs 2,035-crore initial public offering (IPO), comprising a fresh issue of Rs 1,785 crore and an offer-for-sale worth Rs 250 crore by the promoter group, as per MoneyControl. The company has also left room for a pre-IPO placement of up to Rs 357 crore, according to its draft red herring prospectus filed with SEBI. JM Financial, Axis Capital and IIFL Capital Services are managing the issue.
Betting on value, not volume
The early pivot towards value-added dairy products, beginning with paneer in 1994, proved decisive. While milk offered a margin of less than 5%, paneer could generate margins of 20%, ghee reached 22% and ice cream soared to over 35%. This served as an entry point into the category where demand was steadily rising, whereas supply, especially of high quality, remained scarce in Southern India.
By 1995, Milky Mist had exited the liquid milk business entirely.
From supplying five-star hotels in Bengaluru to today, managing over 2,000 distributors across India, Milky Mist’s ascent has been fuelled by infrastructure-first thinking. The company invested in cold chain logistics early on, deploying chillers in kirana stores and GPS-enabled trucks that cut product spoilage and boosted retailer confidence. Today, more than 15,000 Milky Mist-branded chillers operate across India.
Its manufacturing is centred around a 55-acre, fully automated facility at Perundurai, capable of processing 1.5 million litres of milk daily. This plant, commissioned in 2017, cost Rs 550 crore and sources equipment from Germany and Poland to support advanced production of paneer, yoghurt and ice cream.
Farmers at the centre
A large part of the company’s moat is its enduring relationship with farmers. Milky Mist sources milk from over 67,000 farmers in South India, offering them veterinary care, subsidised feed, and financial support, often without formal contracts. The logic is simple but rare in Indian agribusiness: loyalty must be earned, not enforced.
This model has not only ensured consistency in quality but also enabled traceability. A 2025 partnership with MilkLane, worth Rs 400 crore, will allow Milky Mist to procure 100 kilolitres of traceable, premium milk every day over the next three years, covering 10,000 farmers in the process.
Financials churn creamier
As per the DRHP, Milky Mist clocked a 29% growth in revenue from operations in FY24, at Rs 2,349.5 crore. Net profit rose 137% year-on-year to Rs 46 crore. With an EBITDA of Rs 310.4 crore, the company’s margin stood at a healthy 13.2%, a figure more aligned with fast-moving consumer goods (FMCG) companies than traditional dairy cooperatives.
More tellingly, about 75% of Milky Mist’s FY24 revenue came from daily-consumption staples such as curd and paneer. New products added Rs 511 crore, underlining a growth strategy powered by innovation rather than mere scale, as noted in Moneycontrol.
Challenges in the churn
Despite the robust fundamentals, Milky Mist is not without vulnerabilities. The company is entirely dependent on a single manufacturing facility, making it susceptible to disruption. Moreover, its revenue remains geographically concentrated, nearly three-quarters of its sales come from South India.
Competition is intense, too. From dairy behemoths like Amul and Hatsun to FMCG giants such as Nestlé and Britannia, the battle for cold-chain real estate and consumer loyalty is fierce. Yet, Milky Mist is banking on its operational rigour and product quality to stand apart, a philosophy exemplified by CEO K. Rathnam, who spent over a decade at Amul before joining the company.
The next phase
Of the Rs 1,785 crore it plans to raise through the fresh issue, Milky Mist will use Rs 750 crore to pare debt, it had Rs 1,463.6 crore in borrowings as of May 2025, as per Angel One. Another Rs 414.7 crore is earmarked to expand its Perundurai facility to include yoghurt, whey protein and cream cheese lines. Rs 129.4 crore will go into cold-chain equipment such as visi coolers and freezers. The remainder will support general corporate purposes.
Looking ahead, Milky Mist plans to invest Rs 1,000 crore over three years to double its milk-processing capacity and widen its footprint across western and northern India.
What began as an act of desperation by a school dropout is now a Rs 2,000-crore brand preparing to list on Dalal Street. If the public markets are willing to bet on this promise, Milky Mist may well prove that the cream always rises to the top.