Domino’s franchisee plans IPO

 

India's Spending Boom Attracts Several Consumer Cos To The Primary Market

 

DOMINO'S Pizza's Indian franchise, a gym chain and a developer of games for Sony's PlayStation plan to sell shares in India, riding a boom in spending in the world's second-fastest growing major economy.

   Jubilant Foodworks, operator of Domino's Pizza stores, will sell a 36% stake and animator DQ Entertainment (International) will offload 25%, among 48 companies planning first-time share sales, according to data compiled by Bloomberg. Talwalkars Better Value Fitness intends to sell a 25% holding in the next three months, adviser India Infoline said.

   An education company, tour operator and chain of resorts generated three of the top four returns for Indian IPOs this year, outperforming the biggest rally in stocks in 18 years. Consumers drive half the growth in India, one of only two among the world's 15 largest economies that expanded last quarter.

   "Investors like the consumer play stories," Donald D'Souza, investment banking president at India Infoline, said. "India has a huge consumption theme where discretionary spending power offers investors a more stable and sustainable business model."

   Consumer-related IPOs include Hathway Cable & Datacom, India's largest cable television operator, and Cantabil Retail India, a branded apparel maker with about 400 stores.

   "These industries are a play on the country's demographics," said Jayesh Shroff, who helps manage $8.3 billion in assets at SBI Asset Management. "These businesses of gyms, pizza chains are industries of the young people and hugely leveraged on this demographic segment."

   Faster growth has attracted the second-highest inflows from overseas investors this year, driving a 79% rise in India's benchmark Sensitive Index, the most since 1991.

   SBI bought shares in Cox & Kings (India), the tour operator partly owned by a unit of Deutsche Bank. The stock has surged 31% since the company raised Rs 610 crore last month.

   Spending on leisure will increase as the number of households earning at least Rs 600,000 is expected to quadruple to 20 million by March 2014, according to the National Council of Applied Economic Research. Mahindra Holidays & Resorts, returned 48% since its Rs 280-crore IPO in June, the third best performance for an initial share sale in India. Edserv Softsystems, a provider of information technology training and placement services, gave investors the best returns from an IPO, jumping 280% since its Rs 23.8 crore offer in February.

   Faster growth has attracted the second-highest inflows from overseas investors this year, driving a 79% rise in India's benchmark Sensitive Index, the most since 1991.

   Jubilant Foodworks, based in New Delhi, will raise funds to add to the 279 stores it operates for the U.S.'s secondlargest pizza chain in India and Sri Lanka, according to a filing to the regulator. The India Private Equity Fund (Mauritius) and Indocean Pizza Holding Ltd. that bought stakes in the Pizza chain in 1999 will sell their entire 32 percent holding in the offer, arranged by Kotak Mahindra Capital.

   Hyderabad, India-based DQ Entertainment, an animation and visual effects company that develops games for Microsoft Corp.'s Xbox and Nintendo's Wii consoles, plans to sell 19.8 million shares in a sale arranged by SBI Capital Markets.