Retail stocks cheer 100 per cent FDI in single-brand retail

Shares of retail companies rallied on the bourses on Wednesday after the government notified 100 per cent Foreign Direct Investment (FDI) in single-brand retail.

Reacting to the news, shares of Kishore Biyani-led Future Group firm Pantaloon Retail (India) surged by 10 per cent to an early high of Rs 161.40, while Provogue (India) zoomed up by 14.22 per cent to Rs 28.10 on the BSE.

In a similar fashion, Koutons Retail gained 12.52 per cent, Shopper's Stop rose by 9.38 per cent, Tata Group retail venture Trent Ltd advanced by 5.50 per cent and Vishal Retail jumped by 4.98 per cent.

Analysts said the move bolstered hopes that FDI in multi-brand retail might also come through.

The decision to increase FDI in single-brand retail was taken by Cabinet on November 24 along with the decision for opening up the gates for overseas investment in multi-brand retail.

However, the government was forced to put FDI in multi-brand retail on hold in the face of opposition by several political parties, including UPA ally Trinamool Congress.

Till now, 51 per cent FDI was permitted in the single-brand retail sector. Removal of the investment cap will help global fashion brands, especially from Italy and France, to go it alone in the growing Indian market.