FIPB cleared proposals of footwear chain Pavers England, clothing retailer Brooks Brothers and Italian jewellary brand Damiani to invest Rs106 in single brand retail
New Delhi: The Indian government on Friday cleared three foreign direct investment (FDI) proposals worth Rs106 crore in single-brand retail, including that of America's oldest clothing retailer Brooks Brothers and UK's footwear chain Pavers England, reports PTI.
The foreign investment proposal by Italian jewellery brand Damiani to set up a 51:49 joint venture with Mehta's Pvt Ltd also got the government's approval, sources said.
The proposals were cleared by the Foreign Investment Promotion Board (FIPB) headed by Economic Affairs Secretary Arvind Mayaram.
After the meeting, Mayaram said that the proposal of Pavers England has been cleared.
Sources said the footwear retailer plans set to invest Rs100 crore.
At present, the UK-based company sells products through its Chennai-based master franchisee Triton Retail in 28 exclusive stores across India and also through retail outlets of Reliance Footprint, Lifestyle, Shoppers Stop and Westside.
Meanwhile, a senior official said that Brooks Brothers has been given permission to invest Rs6.22 crore in its recently announced 51:49 joint venture with Reliance Brands, a unit of Reliance Industries.
Earlier in June, Reliance Brands had said, "We will be looking at opening five stores over the next three seasons, starting with Fall-Winter 2012 running through Fall-Winter 2013."
The company is targeting Mumbai, New Delhi, Bangalore, Chennai and Chandigarh.
One of the long-term investments of Rakesh Jhunjunwala has posted lacklustre results, with its operating profit as well as net profit declining
VST Industries, the Hyderabad-based tobacco company, announced rather lukewarm quarterly results for the latest quarter ended September 2012. It reported a flattish 6% year-on-year (y-o-y) increase in net sales, to Rs176.19 crore which is less than its three-quarter y-o-y average of 11%. Its operating profits actually dropped by 8% y-o-y to Rs43.34 crore (its three-quarter y-o-y average is just 3%) while its net profits slipped further to Rs27.6 crore, or drop of 17% y-o-y.
Given the high dividend yield of 3.60%, it is a popular amongst the institutional investors, with many of them having increased their stakes over the last three months. The shareholding of foreign institutional investors increased from 3.92% to 4.13% while domestic institutions too saw their appetite increase, having their share go up from 14.91% to 16.91% of total share held. However, one must look closely before following the herd mentality. We will examine the results below.
While the results were not all that impressive, we checked the trend for any secular downfall in sales. We found out that sales actually increased on a quarter-to-quarter basis by 14%, thus underlying that people are still buying its products. Operating profits have been steady. However, profits have indeed declined for four consecutive quarters, which is a worry.
Despite all these negatives, the company’s balance sheet is strong with nearly zero long-term liabilities. Its balance sheet has marginally increased by 3.23% to Rs734.11 crore. The valuation remains on the higher end, with market capitalisation quoting at 15.77 times its operating profits, while its return on equity is astoundingly high, at 46%. The stock closed at Rs1808.65 on the BSE, down 1.99% today.
Gujarat Mineral Development Corporation reported a 60% jump in net sales and a 107% jump in its operating profits, comfortably beating its own averages