Chennai, Jun 11 (IANS): Dairy major Dodla Dairy Ltd will use the Rs 50 crore raised from initial public offering (IPO) for repaying debt and also for expansion, said a top company official.

The company will hit the market with its premium Rs 520 crore IPO that consists of fresh issue of Rs 50 crore and an offer for sale of up to 10,985,444 shares by promoters, promoter group and existing investors.

Briefing reporters about the forthcoming public issue, Dodla Sunil Reddy, Managing Director of the company, said that about Rs 32 crore of the IPO proceeds coming into the company will be used for retiring debt and the balance for incremental capex.

"We will improve milk procurement, invest in chilling plans. We are also looking at inorganic growth," he said.

According to him, the company has sizable internal accruals as well.

Reddy said the company has an appetite to look at acquisitions with a ticket size of about Rs 200 crore, but it should be value accretive.

Dodla Dairy, which will get on to the online sales segment soon, also plans to add a couple of hundred of retail outlets this year to its existing 370 outlets selling milk and milk based products.

According to Reddy, the company gets 73 per cent of its revenues from selling liquid milk and the balance from value added products.

The Dodla Dairy IPO opens on June 16 and the price band will be Rs 421-428 per share. The bid lot will be 35 shares.