Parag Milk Foods Ltd has announced the conversion of its foreign currency convertible bonds (FCCBs) held by the International Finance Corporation (IFC) into equity shares. The company has allotted 57,33,713 equity shares at ₹135 each, following which no FCCBs remain outstanding.
What was announced
In a regulatory filing, Parag Milk confirmed the complete conversion of IFC’s FCCBs into equity. This extinguishes the company’s outstanding obligations under the bond instrument, marking a significant step in simplifying its balance sheet.
Impact on Parag Milk
The move strengthens the dairy major’s equity base and eliminates foreign currency liability risks. With FCCBs now nil, the company reduces exposure to interest costs and currency fluctuations. Analysts see the step as positive for financial stability and shareholder confidence.
Parag Milk Foods, headquartered in Mumbai, is among India’s largest private dairy companies with brands such as Gowardhan, Go, Topp Up, and Avvatar Whey Protein. It operates major plants in Maharashtra, Andhra Pradesh, and Haryana, and is India’s largest private cheese producer.
IFC’s Role
The International Finance Corporation (IFC), a World Bank Group arm, had invested in Parag Milk through FCCBs as part of its mandate to support private sector development in emerging markets. By converting to equity, IFC now takes a long-term shareholder position instead of a debt exposure.
IFC has been a key investor in India’s agribusiness, renewable energy, and financial services sectors. Its continued stake signals confidence in Parag Milk’s growth trajectory in value-added dairy products.
| Detail | Figure |
|---|---|
| Shares Allotted on Conversion | 57,33,713 |
| Conversion Price | ₹135 per share |
| Outstanding FCCBs Post-Conversion | Nil |
| Resulting Effect | Strengthened equity base, lower forex risk |
Market Reaction
Early trade reaction remained subdued, with investors awaiting clarity on how the expanded equity base will affect earnings per share and future fundraising plans. The development, however, is seen as a de-risking measure that simplifies Parag Milk’s capital structure.
Outlook
With FCCBs extinguished, Parag Milk can now focus on expanding its value-added dairy portfolio — particularly in cheese, whey protein, and yogurt. IFC’s long-term equity commitment provides additional credibility, which may aid in securing future partnerships or capital raising.
