By Pooja Thakur Dec. 24 (Bloomberg) — Domino’s Pizza Inc. ’s Indian franchise, a gym chain and a developer of games for Sony Corp.’s PlayStation plan to sell shares in India, riding a boom in spending in the world’s second-fastest growing major economy. Jubilant Foodworks Ltd. , operator of Ann Arbor, Michigan- based Domino’s Pizza stores, will sell a 36 percent stake and animator DQ Entertainment (International) Ltd. will offload 25 percent, among 48 companies planning first-time share sales, according to data compiled by Bloomberg. Talwalkars Better Value Fitness Ltd. intends to sell a 25 percent holding in the next three months, adviser India Infoline Ltd. 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 in a telephone interview in Mumbai. “India has a huge consumption theme where discretionary spending power offers investors a more stable and sustainable business model.” Indian companies have announced plans to raise at least $5 billion next year, compared with $16 billion in 2009, according to Bloomberg data. Share sales may rise to $20 billion by the end of 2010, according to D’Souza. Demographic Play Consumer-related IPOs include Hathway Cable & Datacom Ltd. , India’s largest cable television operator, and Cantabil Retail India Ltd., 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 Co. in Mumbai. “These businesses of gyms, pizza chains are industries of the young people and hugely leveraged on this demographic segment.” SBI bought shares in Cox & Kings (India) Ltd. , the tour operator partly owned by a unit of Deutsche Bank AG. The stock has surged 31 percent since the Mumbai-based company raised 6.1 billion rupees last month, the fourth-best return from an IPO. Spending on leisure will increase as the number of households earning at least 600,000 rupees is expected to quadruple to 20 million by March 2014, according to the National Council of Applied Economic Research. Mahindra Holidays & Resorts India Ltd. , owner of the Club Mahindra Holidays brand, returned 48 percent since its 2.8 billion rupee IPO in June, the third best performance for an initial share sale in India. Best Returns Edserv Softsystems Ltd. , a provider of information technology training and placement services, gave investors the best returns from an IPO, jumping 280 percent since its 238 million rupee offer in February. India’s economy will grow at the fastest pace after China among the Group of 20 nations next year, according to the International Monetary Fund. The $1.2 trillion economy expanded 7.9 percent in the three months ended Sept. 30 from a year earlier, the quickest pace in six quarters. Faster growth has attracted the second-highest inflows from overseas investors this year, driving a 79 percent 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 second-largest 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 Co. Hyderabad, India-based DQ Entertainment , an animation and visual effects company that develops games for Microsoft Corp.’s Xbox and Nintendo Co.’s Wii consoles, plans to sell 19.8 million shares in a sale arranged by SBI Capital Markets Ltd. To contact the reporter on this story: Pooja Thakur at pthakur@bloomberg.net
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Domino’s Pizza, Gym Club Share Sales Tap India’s Consumer Spending Wave
