Retail shares dip on opposition for FDI

Pantaloon Retail, Shoppers Stop, CESC, Trent, Provogue among top losers

Shares of companies engaged in the retail business are under pressure on bourses in morning trades on reports that the Samajwadi Party (SP), Left parties and JD(S) have asked Prime Minister Manmohan Singh not to allow foreign direct investment (FDI) in multi-brand retail.

Pantaloon Retail (India), Shoppers Stop, CESC, Trent, Provogue (India) and Brandhouse Retails have tanked upto 6% on the Bombay Stock Exchange (BSE).

"We urge the government not to open up the retail trade to FDI any further. Political parties across the spectrum are opposed to this move. Many state governments have also stated their opposition," said the letter sent by these parties to the Prime Minister, a PTI report suggests.

The government had allowed FDI in single brand retailing but had suspended the decision to allow such investment in multi-brand retailing due to opposition from several parties including UPA allies. Among the signatories of this letter, SP and JD(S) support the government from outside.