Warburg Pincus LLC, a private equity firm based in US, is looking for a $100-$125 million stake in finance firm Future Capital Holdings, sources said to Reuters.
Future Capital, currently controlled by Indian retailer Pantaloon Retail (India) Ltd (PART.NS), provides consumer and mortgage loans.
Warburg Pincus will pay 165-170 rupees per share, which represents a premium of 18-24 percent to Future Capital's Friday closing price of 136.95 rupees, said the sources, who declined to be named as they were not authorised to speak to the media prior to a public announcement.
"The board (of Future Capital) is going to meet tomorrow to approve the transaction," said one of the sources.
Warburg Pincus and Future Capital officials did not immediately return phone calls seeking comment.
Warburg Pincus, which manages about $40 billion globally, has invested about $3 billion in India, including in mobile telecoms company Bharti Airtel (BRTI.NS) and private sector lender Kotak Mahindra Bank (KTKM.NS).
Pantaloon, India's leading retailer and the founder of Future Capital, is struggling with debt of 58 billion Indian rupees.
Private equity companies invested $1.8 billion in India last year, almost unchanged from $1.7 billion in 2010, according to Thomson Reuters data. They have invested about $800 million so far this year, the data showed.
Morgan Stanley (MS.N) advised Future Capital in the transaction, the sources said.