Trent jumped 8.70% to Rs 1,159.35 at 10:34 IST on BSE after the company said UK's largest retailer Tesco Plc plans to acquire a 50% stake in Trent Hypermarkets.
The announcement was made after trading hours on Tuesday, 17 December 2013.
Meanwhile, the BSE Sensex was up 94.91 points, or 0.46%, to 20,707.05.
On BSE, so far 1.16 lakh shares were traded in the counter, compared with an average volume of 2,289 shares in the past one quarter.
The stock hit a high of Rs 1,260.65 and a low of Rs 1,113 so far during the day. The stock hit a record high of Rs 1,345 on 14 January 2013. The stock hit a 52-week low of Rs 902 on 1 November 2013.
The stock had outperformed the market over the past one month till 17 December 2013, rising 15.65% compared with the Sensex's 1.04% rise. The scrip had also outperformed the market in past one quarter, rising 13.31% as against Sensex's 4.08% rise.
The mid-cap company has an equity capital of Rs 33.23 crore. Face value per share is Rs 10.
Trent announced that it was in discussions with Tesco regarding an investment by Tesco in Trent Hypermarket (THL), which operates the Star Bazaar business and is engaged in multi-brand retail trading. In this context, Tesco is making an application to the Foreign Investment Promotion Board. If the application is successful, the intent would be to enter into a partnership where Trent and Tesco will each own a 50% stake in THL, Trent said in a statement.
THL currently operates 16 stores across the Southern and Western regions of India. The proposed partnership will operate and build on the existing portfolio of Star Bazaar stores in Maharashtra and Karnataka. The application envisages a minimum foreign direct investment in line with the applicable multi brand retail trading policy, the company said.
Noel Tata, Vice Chairman of Trent, commented "The application is a positive step forward in the relationship between the Tata Group and Tesco. We believe that our understanding of the Indian market coupled with Tesco's unparalleled global retail expertise will allow us to leverage the tremendous potential of the market to the benefit of all stakeholders."
In September 2012, the Government of India had allowed 51% foreign direct investment (FDI) in the multi-brand retail sector, but the sector has failed to see any investment so far due to stringent rules set by the government.
The government on 6 June 2013 clarified that the foreign supermarkets entering India must invest in new supply chain infrastructure, such as warehouses and cold-storages, rather than buying existing assets. The government had stipulated that at least 50% of the investment made by the foreign company must be in supply chain infrastructure.
Net profit of Trent rose 73.41% to Rs 15.60 crore on 24.88% rise in net sales to Rs 267.10 crore in Q2 September 2013 over Q2 September 2012.
Trent, a part of Tata Group, is engaged in operating retail chains in India.
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