Wow Momo plans IPO in two years, taking cues from Domino's success

Fast-food chain Wow Momo Foods has announced its intention to go public within the next two years, aiming to follow in the footsteps of Domino's Pizza and leverage the growing demand in India's burgeoning fast-food sector.

The fast-food market in India, currently valued at $5 billion, has experienced substantial growth, particularly among low- and middle-income families. Wow Momo, valued at Rs 2,500 crore and boasting a network of 650 stores, is set to become the first major local fast-food chain to list publicly, capitalising on this shift in consumer preferences.

Backed by Tiger Global, Wow Momo reported a revenue of nearly 4.8 billion rupees ($57.47 million) for the fiscal year ending in March. Co-founder and CEO Sagar Daryani stated that the company aims to double its revenue to Rs 1,000 crore over the next 30 months. "The public markets are really, really growing ... One homegrown fast-food chain IPO in India will change the script for the fast-food play in the country," he remarked.

India's stock market has seen remarkable performance, reaching record highs over 50 times this year. Nearly 200 companies, including e-scooter maker Ola Electric and telecom operator Bharti Hexacom, have raised billions through IPOs. In the restaurant sector, franchises of Western brands like KFC, McDonald's, Burger King, and Domino's have gone public in the past decade. The most recent local listing was Barbeque-Nation Hospitality, which went public three years ago and has seen its shares climb nearly 28 per cent from the IPO price, despite facing challenges in customer footfalls amid rising inflation.

Daryani expressed his intention to emulate the success of Jubilant FoodWorks, which has expanded Domino's from a single store in India in 1996 to over 1,800 outlets. Wow Momo, known for its savory dumplings priced between 109-369 rupees ($1.31-$4.42) per serving, plans to increase its store count to 1,000 and achieve profitability based on core earnings metrics within the next two years.

Despite experiencing a dip in same-store sales from October to May, reflective of a broader slowdown in the Indian fast-food market, Daryani noted that sales have rebounded positively from June to September, signaling a recovery in consumer demand.

(With Reuters inputs.)