Tata Group-promoted Trent Hypermarket has entered into an equal joint venture with the British retail chain, Tesco.

Following the development, Tesco plans to invest ₹850 crore by picking up a 50 per cent stake in the Indian retailer.

While the officials at Trent refused to make any comment on the development, Tesco’s website said that on completion of the transaction, the retailer will operate 12 stores selling a range of merchandise, including food and grocery, personal and home care products, home and kitchen, fashion and accessories in stores operated under the ‘Star Bazaar’ and ‘Star Daily’ banners, across the Southern and Western regions of India.

Trent Hypermarket is a wholly-owned subsidiary of listed entity Trent, which owns and runs departmental stores such as Westside, Landmark, Star Bazaar and Star Daily.

The funds will be used to set up hypermarkets and supermarkets across the country.

At present, Trent Hypermarket sells Tesco products through Star Bazaars, with the latter advising the retailer on various business aspects.

It also has a wholesale supply and franchise and technical service agreement to supply merchandise and provide technical know-how and support to Trent Hypermarket.

In a filing to the bourses, Trent said the company has approved definitive agreements in this regard and is in the process of entering into the joint venture soon. However, the proposed investment is subject to necessary approvals.

Tesco has become the first global multi-brand retailer to launch a supermarket chain in India.

In September 2012, the Government allowed 51 per cent foreign direct investment in multi-brand retailing.

Several other foreign retailers such as Swedish furniture giant Ikea, US-based Walmart, and Germany’s Metro Group are still grappling with the complex foreign investment rules.

The Foreign Investment Promotion Board had approved Tesco’s proposal on December 30.

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