Thanks to the decision to open up foreign direct investment (FDI) in multi-brand retail, shares from these sectors surged sharply. Future Group firm Pantaloon Retail was the biggest gainer as it jumped about 33 per cent to Rs 209 during intra-day trade. However, it pared some gains owing to profit-taking to close at Rs 187.6, still a 19-per cent rise over the previous days' close.
Among others, Provogue jumped 12.4 per cent at Rs 18, Brandhouse Retails soared 11.4 per cent at Rs 15, Koutons Retail India gained the maximum permissible limit of five per cent at Rs 7.15, Rei Six Ten Retail zoomed 10 per cent at Rs 4.5, Trent flared up 4.2 per cent at Rs 1,133 and Shoppers Stop surged 6.4 per cent at Rs 383.45 per cent). Reliance Industries too jumped 3.9 per cent, thanks to its retail exposure.
On Friday, the Government allowed 51 per cent FDI in multi-brand retail subject to State Governments’ approvals. Currently, foreign investors can hold up to 24 per cent.
“Overall, we expect this to be a positive for the Indian retail sector as it will reduce its piling debt and stimulate investment (especially in logistics and cold chain). Biggest players on this are Pantaloon Retail and Trent. We also expect Walmart to be a key beneficiary due to its tie up with Bharti group.
“Other potential beneficiaries could be Spencer’s (part of CESC), Reliance Retail, Lifestyle, Birla Retail, Globus, etc,” said Edelweiss in a research report.