Pantaloon Retail, Shoppers Stop slip as political uncertainty weighs
Pantaloon, Shoppers Stop, CESC slipped over 2% each in early trade on Thursday after the Trinamool Congress, withdrew its support.
By ET Online | Updated:
NEW DELHI: Pantaloon Retail India Ltd, Shoppers Stop and Trent slipped over 2 per cent each in early trade on Thursday after the Trinamool Congress, a key UPA ally, withdrew support from the UPA government.
“This decision by the Trinamool Congress (TC) has - expectedly - raised not only political entropy but also the risk that announced measures may be either diluted or delayed,” UBS said in a report.
Last week, the Cabinet Committee on Political Affairs (CCPA) approved 51 per cent foreign direct investment in multi-brand retail.
The move is expected to pave the way for the much-awaited entry of foreign retail giants such as Walmart, Tesco and Carrefour into the $450-billion retail market.
At 10:20 am, Pantaloon Retail India Ltd was trading 4 per cent lower at Rs 172.60. It has hit a low of Rs 160.90 and a high of Rs 178 today.
Shoppers Stop Ltd was trading 1.7 per cent lower at Rs 371. It has hit a low of Rs 362.50 and a high of Rs 374.55 today.
Trent Ltd was trading 2.2 per cent lower at Rs 1102. It has hit a low of Rs 1073 and a high of Rs 1108.65 today.
CESC was trading 3.3 per cent lower at Rs 311.25. It has hit a low of Rs 307.50 and a high of Rs 315 today.
CLSA is of the view that stocks like Shoppers Stop, Pantaloon, Trent and CESC are likely to benefit from the FDI. Pantaloon is most geared to this development as it has publicly stated that they are in discussions with potential partners and also have imminent funding needs.
“Deal announcements may be quicker for Trent given that it already has a tie-up with Tesco that could be quickly converted into an equity partnership. It also benefits from changes in single brand retail FDI for its partnership with Inditex,” said an CLSA report.
Spencers, which is owned by CESC, could potentially seek a partner, as could Shoppers Stop for its Hypermarket businesses (the company is open to the idea)
“Bharti is aligned with Walmart and Carrefour has entered on its own, but may seek a partner,” CLSA added.
“This decision by the Trinamool Congress (TC) has - expectedly - raised not only political entropy but also the risk that announced measures may be either diluted or delayed,” UBS said in a report.
Last week, the Cabinet Committee on Political Affairs (CCPA) approved 51 per cent foreign direct investment in multi-brand retail.
The move is expected to pave the way for the much-awaited entry of foreign retail giants such as Walmart, Tesco and Carrefour into the $450-billion retail market.
At 10:20 am, Pantaloon Retail India Ltd was trading 4 per cent lower at Rs 172.60. It has hit a low of Rs 160.90 and a high of Rs 178 today.
Shoppers Stop Ltd was trading 1.7 per cent lower at Rs 371. It has hit a low of Rs 362.50 and a high of Rs 374.55 today.
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Trent Ltd was trading 2.2 per cent lower at Rs 1102. It has hit a low of Rs 1073 and a high of Rs 1108.65 today.
CESC was trading 3.3 per cent lower at Rs 311.25. It has hit a low of Rs 307.50 and a high of Rs 315 today.
CLSA is of the view that stocks like Shoppers Stop, Pantaloon, Trent and CESC are likely to benefit from the FDI. Pantaloon is most geared to this development as it has publicly stated that they are in discussions with potential partners and also have imminent funding needs.
“Deal announcements may be quicker for Trent given that it already has a tie-up with Tesco that could be quickly converted into an equity partnership. It also benefits from changes in single brand retail FDI for its partnership with Inditex,” said an CLSA report.
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Spencers, which is owned by CESC, could potentially seek a partner, as could Shoppers Stop for its Hypermarket businesses (the company is open to the idea)
“Bharti is aligned with Walmart and Carrefour has entered on its own, but may seek a partner,” CLSA added.
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