Parag Milk Foods (PMF), is in the business of manufacturing and marketing dairy-based branded food products. PMF has production facilities in Manchar near Pune and Palamaner in Andhra Pradesh.

ICICIdirect has recommended 'Subscribe' to IPO of Parag Milk Foods. Commenting on the investment rationale, the stock broker said, ''Parag Milk Foods is available at 73x its FY15 earnings and at 44x its FY16E earnings (annualised from 9MFY16 earnings) at the upper end of the price band of Rs 220-227. India being the largest milk producer and consumer in the world, we believe in the long term prospects of the domestic dairy industry. It has immense potential for growth for PMF.

We believe PMF is available at fair valuations considering the opportunity size lying ahead of the company in the dairy industry that is constantly in the process of evolution from raw milk to focus towards value added milk and milk products. Also, the discount of Rs 12 a share on final issue price for retail investors being on offer, it increases the attractiveness of the company for long term investors. We recommend SUBSCRIBE rating for the IPO.''

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