Tesco India

Franchise In India, Franchise News India,Tesco Plc became the first foreign supermarket chain to invest in India as the British retailer announced that its joint venture with Tata Group’s Trent Ltd was fully in place.

“Following the previous announcement and receipt of requisite approvals, Tesco has completed the establishment of a 50:50 joint venture with Trent Ltd, part of the Tata Group. The joint venture company, Trent Hypermarket Ltd (THL), operates the Star Bazaar retail franchise business in India,” Tesco said in a filing late Tuesday.

This makes it the first foreign direct investment (FDI) in multi-brand retail since the rules regarding this were relaxed. To be sure, not all states allow FDI in the segment.

The latest development comes days after the Tesco-Trent alliance received the final nod for a joint venture from the Competition Commission of India. Prior to approaching CCI, Trent Hypermarket had transferred four stores in Gujarat and Tamil Nadu–two states where FDI in supermarkets is barred–to subsidiary Fiora Hypermarket to comply with rules.

A person with direct knowledge of the situation said Tesco had made the $90 million investment for a 50% stake in Trent Hypermarket, which operates 12 Star Bazaar hypermarkets.

Last December, the previous UPA government approved Tesco’s application to invest about $110 million in a 50:50 joint venture with Trent.

“We have been working with Tata in India for over five years, supporting the development of their Star Bazaar and Star Daily multi-brand retail stores via the provision of wholesale and franchise agreements.



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