The dairy product maker Hatsun Agro Product Limited (HAP) has stated that it will pay Rs 233 crore  which comes to about 27.5 million to acquire all of Milk Mantra's shares. The goal of this acquisition is to increase HAP's market share in the dairy industry in Eastern India, especially in Odisha, where Milk Mantra's "Milky Moo" brand has a significant following, the firm stated in a stock exchange filing.

A number of Share Purchase Agreements (SPAs) and other transaction paperwork with Milk Mantra's current promoters and shareholders would be used to finalize the acquisition. Following the acquisition, HAP will acquire full ownership of Milk Mantra.

Aavishkaar Venture Capital, Fidelity Growth Partners, Neev Fund, Eight Roads Ventures, and US-based DFC are among the investors who have contributed close to USD 35 million to Milk Mantra. Milk Mantra was founded in 2009 and offers a variety of goods, such as milk, curd, cottage cheese, buttermilk, and animal feed.

Considering that Milk Mantra recorded operating income of Rs 276.42 crore in FY24 and that the acquisition cost was Rs 233 crore, this acquisition appears to be a slump sell. In the most recent fiscal year, the Bhubaneshwar-based business also reported a profit of Rs 9.78 crore. But throughout the last three fiscal years, its revenue has essentially been the same.

With a revenue of Rs 1,907.21 crore in FY24, the well-known company Milky Mist established itself as a major force in the D2C dairy brand market. Media sources state that Milky Mist plans to list on an initial public offering (IPO) this year with the goal of raising about Rs 2,000 crores.

Newer businesses like Country Delight, Akshayakalpa, and Sid's Farm are also competitors of Milk Mantra.

"Grow or die" appears to have been the motto that brought Milk Mantra to ruin because, despite its profitability, its inability to break out of its rut led to its sale for a valuation below one times revenues. Additionally, it suggests that a sizable portion of the portfolio is liquid milk, where margins are once more severely constrained until you try a gimmick like A2 milk or another option and manage to get away with it long enough. The acquisition would appear to be a reasonably priced fit for Hatsun's portfolio, which is publicly traded and based in Chennai. It would greatly expand Hatsun's footprint at a reasonable cost. which also explains why the stock price barely moved after the announcement.