Retail stocks rise on FDI vote
As the government won the first leg of voting in the Lok Sabha to allow FDI in multi-brand retail, stocks of retail companies surged and industry leaders welcomed the development. HT reports.business Updated: Dec 06, 2012 22:14 IST
As the government won the first leg of voting in the Lok Sabha to allow foreign direct investment in multi-brand retail, stocks of retail companies surged and industry leaders welcomed the development.
"Given the opportunities of consumption in the Indian space, there is a need for investment and experienced professionals in the space" said Rakesh Biyani, joint MD of Future Group, which owns the Big Bazaar chain.
"Serious global investors have been looking at more clarity in this area and this is a step towards it."
The vote could embolden the government to take up other pending reform measures, which include increasing FDI limit in insurance and pension sectors.
"This reinstates confidence in the government and its ability to take decisions," said DK Joshi, chief economist, Crisil.
"However, for the full benefit to percolate, it is important that all states to take a concerted decision to allow FDI in retail."
Industry believes the development is sentiment booster. "The Lok Sabha voting is certainly a sentiment booster and it will help accelerate plans of retailers in India," said Bijou Kurien, president, lifestyle at Reliance Retail.
The Confederation of Indian Industry (CII) said that the move would lead to capital infusion in the country. "It would give the much required comfort to the foreign investors as the issue has been discussed in Parliament in detail," said Chandrajit Banerjee, director-general, CII.
Anshuman Magazine, chairman of South Asia and property consulting firm CB Richard Ellis said this would be a "game-changer." "This spillover effects would boost the real estate sector in a big way though the impact would be felt only after a year," he said.
However, the Confederation of All India Traders said that the move would be detrimental to the progress of small farmers and traders in India.