New Delhi, Aug 23 (PTI) Andhra Pradesh Chief Minister N Chandrababu Naidu has once again topped the Association of Democratic Reforms’ (ADR) annual list of India’s richest CMs, with most of his declared Rs 931 crore wealth coming from his family’s stake in a pure-play dairy retail firm he founded 33 years ago without any state support.
The ADR report, based on affidavits filed by chief ministers before the last assembly elections they contested, lists West Bengal Chief Minister Mamata Banerjee at the bottom on the list.
While Naidu does not own any shares in Heritage Foods Ltd – the milk and dairy product retailer set up in 1992 with a seed capital of just Rs 7,000 and listed on bourses in 1994 – his wife Bhuvaneswari Nara owns a 24.37 per cent stake, which is counted as the Andhra chief minister’s wealth.
Nara family (promoters) own a total of 41.3 per cent of Heritage Foods which has seen market capitalisation rise from just Rs 25 crore in 1995 to Rs 4,381 crore (based on Friday’s closing price of shares on the BSE).
The market capitalisation reached its highest ever Rs 6,755 crore during June 2024, with life-time high shareholders of 1,81,907.
Explaining the context, Heritage Foods officials said the company is a pure-play dairy products retailer and not in any crony capitalist sector like infrastructure.
A retail firm, which does not get any government subsidy or other support, can only grow if its products are accepted by masses. And this company was set up when Naidu was just an MLA. He became chief minister of the state much after the firm got listed on stock exchanges.
They said in the early 1990s Naidu’s home district of Chittoor in united Andhra Pradesh was the state’s largest milk producing district.
In 1992, there was a milk surplus and there was a marketing crisis for the milk farmers.
Spurred by this opportunity, Naidu set up Heritage Foods in 1992 with an authorised capital of Rs 1 crore and paid-up capital of Rs 7,000.
Heritage commenced its operations during 1993 and brought an initial public offering (IPO) in the following year. It was oversubscribed 54 times, and shares were listed on the BSE and NSE. An amount of Rs 6.50 crore was raised from the IPO.
During the first year of its operations, Heritage Foods set up its first milk chilling unit at Chittoor with an investment of Rs 1.60 crore, they said adding it handled 19,000 litres of milk per day and clocked revenue of Rs 4.36 crore in its maiden year of operation with a profit (PAT) of Rs 19 lakh.
The turnover of the company crossed Rs 100 crore by FY 2000 (April 1999 to March 2000 financial year), Rs 500 crore by FY 2008, Rs 1,000 crore by FY 2011, Rs 2,000 crore by FY 2016, Rs 3,000 crore by FY 2023, and Rs 4,000 crore by FY 2025.
The net worth of the company grew from Rs 9.99 crore (1994) to Rs 972 crore (2025).
The growth of the company was funded by raising debt from a consortium of banks – Bank of Baroda, Andhra Bank (now Union Bank of India), ICICI Bank, HDFC Bank and Kotak Mahindra Bank.
Officials said Heritage Foods was born out of a crisis facing dairy farmers in Chittoor district. It capitalised on the opportunity that was created by the economic reforms of the early 1990s, which opened up the milk sector for private investments.
“This social enterprise was built on ethical principles driven by the noble purpose of empowering the farmers, which is reflected in the mission statement of the company,” one of the officials explained.
Bhuvaneswari took over the responsibility of running Heritage Foods in 1994 after Naidu resigned from the company to join the government of Andhra Pradesh as minister and later as Chief Minister.
She is the managing director of the company while Nara Brahmani (daughter-in-law of Naidu) is executive director for more than a decade now. Brahmani, the wife of Nara Lokesh, is a graduate of Stanford business school who has worked in leading global dairy companies.
Loans taken from Bank of Baroda and other nationalized banks towards expansion activities were repaid and post COVID, Heritage Foods was declared a debt-free company, they said.
Under Bhuvaneswari, Heritage Foods expanded to other states, officials said adding nearly 3 lakh dairy farmers in nine states are associated with the firm. Heritage milk and milk products are now available in 17 states.
Over the past three decades, Heritage emerged as one of the most trusted dairy brands, which was built on supplying high-quality milk and milk products, officials said.
“Heritage Foods is growing on its own strength without availing any undue benefits like allotment of government lands, minerals, contracts, etc. The growth of Heritage is based on its own sincere efforts, business strategies, operational efficiencies, quality assurance, trust of the consumers, and, more importantly, the affinity of the farmers,” an official said.
“Heritage continues its journey of growth in pursuit of its sacred Mission – Delighting Consumer and Empowering the Farmer without side-stepping from its purpose and principles.” Heritage Foods is a proud partner in the incredible growth of the dairy sector in India, which is the largest milk producer in the world since 1997. PTI ANU
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