New Delhi: Trent Hypermarket a joint venture of Tata Group and UK-based Tesco is all set to invest Rs 250 crore in a bid to open more outlets, says a report in Economic Times.
Trent's board is expected to raise up to Rs 250 crore through loans, guarantee, securities or way of subscription, said the ET report.
In December 2013, the Congress government had allowed Tesco's application to invest about $110 million (Rs 680 crore at current exchange rate) in the joint venture.
‘The company intends to add another five hypermarkets in 2015 to the dozen outlets it already has, but the main focus is on opening smaller convenience stores,’ ET report quoted source.
Congress-led government permitted up to 51 per cent foreign holding in multibrand retail in late 2012. Besides, decision to allow such outlets depended on the state government.
However, the then opposition parties opposed the move following which retail giant Walmart did not invest in setting up retail stores.
By far Tesco is the only foreign retailer that has invested in the country. Besides, there were assumptions and concerns about the new government, as they are against FDI in multi-brand retail.
Since, Tesco’s investment was already been approved, and going negative on the decision might hurt sentiments.
"The BJP wouldn't want to upset the applecart severely. While they may not be in favour of FDI, they might not roll it back with retrospective effect,"ET quoted Devangshu Dutta, chief executive at retail consultancy Third Eyesight.
The new outlet of this multi-brand retail is expected to come up in Karnataka, which is a Congress-ruled state.