Shares digital

A cash shell set up to invest in business process outsourcing groups has turned to the leisure sector after failing to find a deal at the right price. Curries are now the order of the day for Indian Outsourcing Group (IOS:AIM).

Shareholders will vote on 25 February on the reverse takeover of Mela, a London-based owner of three Indian restaurants and a catering business. If successful, Mela will use the cash shell to list under the new name of Indian Restaurants Group.

The company wants to become the UK's first national curry chain, acquiring and rebranding rival restaurants. In addition to sit-down meals, it sees revenue opportunities in lunchtime takeaways and sports and event catering, including Indian weddings.

It's a brave decision to bring a new leisure business to the market given the downturn in consumer spending. Its existing restaurants, Chowki, 3 Monkeys and Mela, have a good reputation for quality, mid-market food, but curry is a highly competitive market.

Wagamama was able to expand quickly in the UK as noodle bars are still a relatively new concept on these shores. Curry houses are in every city and every town. There is probably scope for a national curry brand to thrive, but it's quite a jump from having a handful of restaurants to becoming a household name.

IOS non-exec director Nigel Robertson helped to bring online fashion retailer Asos (ASC:AIM) to the market – which has been a runaway success - and is expected to join the board of Indian Restaurants.

The shares of the cash shell have fallen 13% to 15.25p since the new strategy was announced. Investors who find the curry proposition to their taste may want to buy into this price weakness.