Indian Terrain, Monte Carlo up 5-8% after Cabinet nod for 100% FDI in single-brand retail

Stocks like Indian Terrain, Monte Carlo and Zodiac Clothing rallied 5-8 percent after finally the Cabinet has approved 100 percent foreign direct investment in single-brand retail that had been pending for long.

Relaxo Footwears, Mirza International and Bata India also gained 1-3 percent while Future Retail, V2 Retail and Avenue Supermarts rallied 1-3 percent.

The Cabinet Committee today has approved allowing 100 percent FDI in single-brand retail via automatic route.

As India being the big consumption market, this news is good for companies which are looking for expansion and entering into India, Charath Narsimhan, CEO, Indian Terrain said in an interview to CNBC-TV18.

This is one big step by the government to bring foreign investment into India, he added.

Rabindra Jhunjhunwala, Partner, Khaitan & Co said, "The approval through automatic route with respect to single brand retail trading will quicken the FDI clearance process as no prior government approval would be required."

He expects that FDI in single brand retail trading sector will now gain further momentum due to the process not being subject to regulatory scrutiny and approval process.

Stuti Galiya, Counsel, Khaitan & Co also said, "This is a welcome move by the Government and is expected to boost FDI in single brand retail trade sector. It is aimed at providing investor friendly climate to the foreign investors."

FDI norms for construction & aviation sectors also eased. Jet Airways and SpiceJet gained 1-3 percent.

The Cabinet has approved 100 percent FDI in construction sector via automatic route and investment up to 49 percent under approval route in Air India.

The clearance to FDI in Air India is to facilitate its divestment.

On top of that, the Cabinet also allowed FIIs/FPIs to invest in power exchanges through the primary market route.

At 12:48 hours IST, Zodiac Clothing Company was up 4.33 percent at Rs 243.50, Monte Carlo Fashions up 5.5 percent at Rs 635 and Indian Terrain Fashions was up 6.16 percent at Rs 233.40 on the BSE.

Jet Airways was quoting at Rs 863, up 3.08 percent and Interglobe Aviation was at Rs 1,245.40, up 1.50 percent while Bata India was at Rs 756.05, up 1.20 percent.