Pantaloon Retail, Shoppers Stop, Trent up on FDI buzz
Shares in Pantaloon Retail, Shoppers Stop, Trent and V2 Retail rose on Friday on reports that the Cabinet will shortly consider a proposal to allow 51% foreign direct investment (FDI) in multi-brand retail.
By ET Online | Updated:
NEW DELHI: Shares in Pantaloon Retail, Shoppers Stop, Trent and V2 Retail rose on Friday on reports that the Cabinet will shortly consider a proposal to allow 51% foreign direct investment ( FDI) in multi-brand retail.
The commerce and industry ministry has prepared a note for the Cabinet to allow 51% FDI in multi-brand retail and increase the limit on single-brand retail to 100% from the current 51%. “The proposal is expected to be taken up soon by the Cabinet, possibly as early as next week,” a government official told ET.
“The move will benefit Pantaloon Retail (PRIL) and Trent as these companies currently have or are in the final stages of tie-ups with global retailers eagerly waiting to enter India,” said a research note from Edelweiss.
Shares in Pantaloon Retail rose as much as 5.4 percent. “Pantaloon has demonstrated an ability to develop appropriate business models.... This, combined with over 15 million sq feet of prime real estate under various successful formats (versus 4-5 million for its nearest competitor), is likely to make the company a preferred partner among foreign retailers,” said Morgan Stanley in a report.
Transnational retail chains such as WalMart, Carrefour, and Tesco have been waiting impatiently for years to open their stores in India, and the move to open this sector will send positive signals to foreign investors.
Over the last few years, the government has allowed 100% foreign ownership in cash and carry operations and 51% FDI in single-brand retail, but lack of political consensus has so far kept foreign competition out of multi-brand retail. Opposition parties and some constituents of the UPA like the Trinamool Congress have argued that FDI in the $400-billion sector will throw small shopkeepers and traders out of business.
Read the complete story on “Cabinet may consider proposal to allow 51% FDI in multi-brand retail”
At 12:25 p.m., shares in Trent were up 1.1percent at Rs 1,050, Shoppers Stop gain 2.45 percent at Rs 358.50, Pantaloon Retail surged 3.4 percent at Rs 188.30 and V2 Retail Ltd was up 5.7% to Rs 17.45.
The commerce and industry ministry has prepared a note for the Cabinet to allow 51% FDI in multi-brand retail and increase the limit on single-brand retail to 100% from the current 51%. “The proposal is expected to be taken up soon by the Cabinet, possibly as early as next week,” a government official told ET.
“The move will benefit Pantaloon Retail (PRIL) and Trent as these companies currently have or are in the final stages of tie-ups with global retailers eagerly waiting to enter India,” said a research note from Edelweiss.
Shares in Pantaloon Retail rose as much as 5.4 percent. “Pantaloon has demonstrated an ability to develop appropriate business models.... This, combined with over 15 million sq feet of prime real estate under various successful formats (versus 4-5 million for its nearest competitor), is likely to make the company a preferred partner among foreign retailers,” said Morgan Stanley in a report.
Transnational retail chains such as WalMart, Carrefour, and Tesco have been waiting impatiently for years to open their stores in India, and the move to open this sector will send positive signals to foreign investors.
Over the last few years, the government has allowed 100% foreign ownership in cash and carry operations and 51% FDI in single-brand retail, but lack of political consensus has so far kept foreign competition out of multi-brand retail. Opposition parties and some constituents of the UPA like the Trinamool Congress have argued that FDI in the $400-billion sector will throw small shopkeepers and traders out of business.
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Read the complete story on “Cabinet may consider proposal to allow 51% FDI in multi-brand retail”
At 12:25 p.m., shares in Trent were up 1.1percent at Rs 1,050, Shoppers Stop gain 2.45 percent at Rs 358.50, Pantaloon Retail surged 3.4 percent at Rs 188.30 and V2 Retail Ltd was up 5.7% to Rs 17.45.
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