Parag Milk Foods (PMFL) is one of the leading manufacturers and marketers of Dairy-based branded foods in India, is coming with an initial public offer (IPO) to raise Rs 7530-7670 million at a price band of Rs 220-227 per equity share. This IPO is a mix of offer for sale 20.57 million shares and fresh offer of 13.3-13.7 million shares based on the upper price band and the lower price band of the price band.

Angel Broking has recommended 'Subscribe' to IPO of Parag Milk Foods. Commenting on the investment rationale, the stock broker said, ''At the upper end of the issue price band, the company is seeking a P/E multiple of 37.6x its 9MFY2016 annualized earnings based on pre-issue outstanding shares. Further, retail investors will be given a discount of Rs 12/share. Considering the company has a diversified product basket, strong brands and wide distribution network, we believe that the company will continue to perform well on both the top-line and the bottom-line front. Hence we recommend investors to Subscribe to the issue from a longer term perspective.''

ICICIdirect 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. 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.''

Prabhudas Lilladher, said, ''PMF is the preferred cheese supplier to Dominos, KFC, Pizza Hut and other QSR’s in the country. Parag is one of the leading suppliers in India of whey protein in B2B segment. PMF drives 12% of sales from B2B segment including hotels, restaurants and caterers; with no single client constituting more than 2% of sales. We recommend a Subscribe.''

BoB Capital Markets Research, said, ''PMFL grew at a CAGR of 21.6% over FY11 to FY15 and posted revenue of Rs.14,387 million in FY15 and Rs 12,306 million in the first nine months of FY16. EBITDA grew at a CAGR of ~21% to Rs 1063 million and Rs.1075 million in the first nine months of FY16. We believe that the company is poised for strong growth going forward on account of leading manufacturers and marketers of dairy-based branded foods in India; integrated business model; pan India presence; established brand; strong customer base in retail as well as intuitional like Yum! Restaurants (India) Private (for Pizza Hut, Taco Bell and KFC), Jubilant Foodworks (for Domino's Pizza) and Sankalp Recreation Private (for Sam's Pizza); growing dairy industry in India; increasing per capita income. Hence we recommend, 'SUBSCRIBE' to the issue.''

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