Allowing 51% FDI in multi-brand retail has a potential to bring in $10 billion over the next five years and major retailers are expected to have a foreign partner in place in the next 8-9 months, say experts.

?The retail market may potentially get about $10 billion over the next five years, but this depends on the number of states adopting this policy and sourcing from small and medium enterprises. We expect the industry to grow 20% per year.? said Kumar Rajagopalan, CEO of the Retailers Association of India, an apex body of organised retailers in the country.

This will be positive for the sector as a whole, analysts say, where capital is severely constrained and companies have had to take on significant debt to put up front-end stores as well as invest in back-end infrastructure. This move is expected to benefit the categories in household, apparel, footwear businesses, apart from hyper markets. High-end and luxury products may not be able to get their raw materials sourced from India, especially in case of electronics, they say. Kishore Biyani?s Future Group and Bharti Enterprises are slated to be the biggest gainers from this as of now. ?You will see a lot of action from us on the FDI front now,? Future Group chairman Kishore Biyani said on Friday. ?Some of the immediate developments will be in our home and electronics business.?

Biyani?s Pantaloon Retail India?s electronic store, eZone, had been reorganising itself and shutting unprofitable stores. The company?s home business Hometown had been looking for funds too.

PRIL had long-term borrowings of R2,787 crore whereas cash and bank balances stood at R337 crore as of June 30, 2012. The company’s shares have lost 45% of their value in the last one year.

?It?s a question of looking at raising money for each of the formats. eZone is also one of the formats. We would look at eventually accelerating the growth for new funding. As and when that happens, there would be plans that will be drawn out,” said Rajan Malhotra, president ? customer strategy ? Future Group.

Bharti and Walmart, which operate about 200 supermarkets in the northern part of the coutry, would now look at opening new stores the next year. The Indian conglomerate had incurred a loss of R1,200 crore from its wholesale and retail businesses last year.

Meanwhile, lifestyle store operator Shopper Stop?s managing director Govind Shrikhande said that although they are not directly benefited right now, ?We would study the policy, and then look forward for any JV in mixed retail format.”

According to Pankaj Gupta, practice head, consumer & retail, Tata Strategic Management Group, most product categories have players in the Indian market, and it would be easier for a foreign player to buy an existing business and build on it than start a new retail business.

?The primary focus in the next couple of years will be buying into existing multi-brand retail businesses in India. Over the longer term, there could be selective entry of retailers. However, the investment is likely to paced over a 5-10-year period as greenfield development is likely to be slow.?