Prabhat Dairy’s sale of its dairy business to Lactalis appears to be negative for minority shareholders, given the company’s exit from its main dairy business.
This is because the company plans to use the cash proceeds from the transaction to invest in the expansion of its insignificant animal nutrition business, research firm Emkay Global, said.
Due to this which said it is suspending its coverage on Prabhat Dairy, said in a note. After this transaction, Prabhat will be left with its insignificant animal nutrition and genetics business (1 per cent of FY18 sales) that has recently entered into a tied-up with DLG, it said.