The Dairy Meltdown

Abstract

The case highlights the bankruptcy case of Kwality Limited, a significant Indian dairy company. Haldiram Snacks submitted a final bid of ₹1.45 billion to the Committee of Creditors for Kwality Limited, which is currently undergoing bankruptcy proceedings LiveMint (2019). This bid, a slight increase from their earlier rejected bid of ₹1.42 billion, has raised concerns due to its inadequate coverage of the company’s substantial outstanding debt of ₹19 billion Despite extensions, Haldiram Snacks remains the sole bidder, presenting a resolution plan under the Indian Insolvency and Bankruptcy Code (2016). The bankruptcy process was initiated in 2018 by financial creditors KKR India Financial and Punjab National Bank. The bid’s insufficiency, covering less than 10% of the debt, prompts reflections on overlooked warning signs and preventive strategies for the future. The larger context of the Indian dairy industry is provided, highlighting significant production and consumption figures, the growing organized dairy sector and the demand for value-added products. Kwality’s growth and expanding farmer network are briefly touched upon. The case overviews Kwality Limited’s bankruptcy, Haldiram Snacks’ bid, the company’s history and performance, and the broader Indian dairy industry landscape. It underlines the bid’s shortfall in comparison to the outstanding debt and raises pertinent questions about the company’s downfall and preventive measures moving forward.