India's Wow Momo takes cues from Domino's for IPO in two years

Jubilant FoodWorks

25/09/2024 08:55

By Praveen Paramasivam
       CHENNAI, Sept 25 (Reuters) - Indian fast-food chain Wow
Momo Foods plans to go public within two years, its CEO said, as
the popular dumpling brand aims to replicate the rapid expansion
of Domino's Pizza in the world's most populous country.
    India's $5 billion fast-food sector has seen significant
growth, driven by rising demand among low- and middle-income
families.
    Valued at 25 billion rupees ($299.33 million) with a network
of 650 stores, Wow Momo plans to become the first major local
fast-food chain to go public, riding on this shift in consumer
behavior. 
    Tiger Global-backed Wow Momo, which reported revenue of
nearly 4.8 billion rupees ($57.47 million) for the fiscal year
ending in March, is aiming to double its revenue to 10 billion
rupees over the next 30 months, co-founder and CEO Sagar Daryani
told Reuters late on Tuesday.
    "The public markets are really, really growing ... One
homegrown fast-food chain IPO in India will change the script
for fast-food play (in the country)," Daryani said.
    India's booming stock market  .NSEI  has hit record highs
over 50 times this year, with nearly 200 companies, including
e-scooter maker Ola Electric  OLAE.NS  and telecom operator
Bharti Hexacom  BHAX.NS , raising billions. 
    In the restaurant sector, franchisees of Western brands like
KFC, McDonald's  MCD.N , Burger King, and Domino's  DPZ.N  have
gone public in the past decade. One of the most recent local
listing was of Barbeque-Nation Hospitality  BARQ.NS , which went
public three years ago.
    Shares of Bengaluru, Karnataka-based Barbeque-Nation have
climbed nearly 28% from their IPO price despite seeing some
challenges with footfalls among inflation-weary consumers.
    Daryani said he plans to replicate Jubilant FoodWorks
 JUBI.NS 's success, which has expanded Domino's from a single
store in India in 1996 to over 1,800 outlets. 
    Wow Momo, which offers savory dumplings priced between
109-369 rupees ($1.31-$4.42) per serving, plans to increase its
store count to 1,000 and become profitable on the basis of a
core earnings metric within two years.
    While the company experienced a dip in same-store sales from
October to May, mirroring a broader slowdown in the Indian
fast-food space, sales have recovered, turning positive from
June to September, Daryani added.
    
($1 = 83.5200 Indian rupees)

 (Reporting by Praveen Paramasivam; Editing by Nivedita
Bhattacharjee)
 ((Praveen.Paramasivam@thomsonreuters.com; +91 867-525-3569;))