Milky Mist flags insurance, food safety, technology and management risks in RHP
New Delhi, Aug 15 (IANS) Dairy products maker Milky Mist Dairy Food has warned that inadequate insurance coverage, food safety incidents, technology disruptions and challenges in retaining key management personnel could adversely affect its business, according to its red herring prospectus (RHP).
The company said its insurance coverage may not fully protect it against losses arising from damage to assets, product liability claims or business interruptions. As of March 31, 2026, Milky Mist’s assets had a book value of Rs 2,546 crore (Rs 25.46 billion), while insurance coverage stood at Rs 2,441 crore, covering about 95.9 per cent of the gross book value of assets.
The company noted that its insurance policies are generally renewed annually and there is no assurance that future renewals will be available on favourable terms, in a timely manner or at all.
The dairy products maker also highlighted its dependence on senior management and key managerial personnel for business continuity and strategic decision-making.
Milky Mist reported 13 key managerial personnel and senior management executives as of March 31.
While attrition in this category was nil in fiscal 2026, compared with 7.69 per cent in fiscal 2025 and 8.33 per cent in fiscal 2024, the company said competition for experienced professionals remains intense and replacement of key personnel could take considerable time and resources.
The company further disclosed a governance-related risk, noting that a majority of its directors are not currently and have not previously been, directors of listed companies.
According to the IPO document, the absence of experience in handling responsibilities and regulatory complexities associated with listed entities could affect the board’s ability to address issues specific to a publicly traded company following the proposed listing.
Milky Mist also cautioned investors about risks arising from food-borne illnesses, allergic reactions, epidemics affecting dairy cattle and product-quality incidents.
The company said any outbreak linked to key raw materials such as milk could lead to lower consumer demand, enhanced regulatory scrutiny, withdrawal of products by distributors and retailers and higher testing costs.
Similarly, inadequate allergen labelling or accidental cross-contamination could expose it to product liability claims, regulatory action and reputational damage. Negative publicity surrounding product quality, whether real or perceived, could weaken brand equity, reduce sales and increase promotional spending, the company added.
In addition, Milky Mist said its information technology systems are critical for manufacturing, inventory management, distribution, financial operations and supply-chain management.
System failures, cyberattacks, telecommunications disruptions, computer viruses or other security breaches could disrupt operations, result in financial losses and expose the company to legal liabilities and reputational harm, as per RHP document.
Separately, Milky Mist said a substantial portion of the IPO proceeds would be used to reduce debt. The company plans to utilise Rs 497 (Rs 4.97 billion) from the net proceeds of the public issue towards repayment, prepayment and/or redemption of certain outstanding borrowings.
It said the actual borrowings to be retired would depend on factors including interest costs, lender approvals, prepayment conditions, penalties and other commercial considerations.
The company’s Rs 1,553 crore public issue was opened between August 11 and August 13 which comprises a fresh issue of Rs 1,428 crore and an offer for sale of Rs 125 crore. The price band ranges between Rs 133 and Rs 140 per share.
Shares of Milky Mist Dairy Food will list on NSE and BSE with a tentative listing date fixed as August 18.
–IANS
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