Shares of retail companies rallied on the bourses today after the government notified 100% 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% to an early high of Rs 161.40, while Provogue (India) zoomed up by 14.22% to Rs 28.10 on the BSE.
In a similar fashion, Koutons Retail gained 12.52%, Shopper's Stop rose by 9.38%, Tata Group retail venture Trent Ltd advanced by 5.50% and Vishal Retail jumped by 4.98%.
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% 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.
