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Showing posts with label Wal Mart Reliance Mart. Show all posts
Showing posts with label Wal Mart Reliance Mart. Show all posts

FDI in retail: Retailer shares rally

MUMBAI: Shares in retailers jumped on Friday after the government moved to open up the supermarket sector to global giants, a decision seen prompting a flurry of investments and tie-up opportunities for local players.

The government on Thursday approved 51 percent foreign direct investment in multi-brand retail, paving the entry of international firms such as Wal-Mart, Tesco and Carrefour into the $450 billion market.

"FDI in multi-brand retail would benefit capital-constrained retailers such as Pantaloon Retail," Wall Street bank JPMorgan said in a research note on Friday.


"Accelerating the pace of investment in the supply chain to meet demands of increasing scale and enhancing efficiencies... besides expertise of foreign retailers."

Shares in Pantaloon Retail (India) jumped as much as 18.2 percent, Shopper's Stop rallied 11.4 percent, and Trent, part of the salt-to-steel Tata Group conglomerate, rose 17.2 percent.

In comparison, the BSE Sensex was down 0.7 percent at 9:35am (0405 GMT).

The government said late on Thursday that would also raise the cap on foreign investment in single-brand retailing to 100 percent from 51 percent.

The new rules may commit supermarkets to strict local sourcing requirements and minimum investment levels aimed at protecting jobs, according to local media.