Trent Hypermarket to Invest US$40 million for Business Expansion

Published By : 22 Jan 2015 | Published By : QYRESEARCH

Trent Hypermarket, the joint venture that is equally owned between the UK based Tesco and the TATA group, plans to invest US$40 million as the only Indian multi-brand retailer with foreign investment focuses on opening more stores. 

The intended expansion is expected to be seen as a test case for the ruling government’s stance towards foreign direct investment in the supermarket sector. The government’s stated policy is against FDI in stores, which sells multiple brands, but market experts say that the government is not likely to interfere with the investment plan of Trent at present.

According to a declaration made by the company, Trent's board of directors has been authorized to raise upto US$40 million through loans, securities, guarantee, or way of subscription. A copy of this declaration was filed with the Registrar of Companies in the beginning this month. 

In December 2013, the previous government had accepted the application put by Tesco to invest about US$110 million in the joint venture. 

Trent did not respond to an email wanting a comment on its plans. Sources with information about the matter stated the company plans to add another set of five hypermarkets in 2015 to the dozen outlets that already exist, but the main focus is on launching smaller convenience stores.

In 2012, the previous government allowed up to 51% foreign stake in multi-brand retail. However the government also declared that states can take the decision on whether or not to permit such outlets in their respective regions. But with main opposition parties, opposing the move as well as lack of precision on some rules and rigid sourcing requirements made organizations such as Wal-Mart Stores of the US to keep away from making any investments in the Indian consumer goods market.
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