Singapore Technologies Telemedia (STT), a strategic investor backed by Temasek Holdings, is reportedly eyeing a controlling stake in the data centre business of Tata Communications.
The deal to buy a 74 per cent stake in the Indian firm is valued at 45 billion rupees (S$964 million), media reports said.
STT's offer is supposedly the best among a list of interested buyers including Google, Amazon, Carlyle Group, Blackstone and Bain Capital, according to the reports.
No binding offers have been submitted yet, but exclusive negotiations are likely to commence soon and be concluded by the end of the month.
Tata will maintain a minority stake in the deal, while the buyer will run its data centre operations across 44 locations in India and overseas.
STT told The Straits Times that it does not comment on market rumours.
Tata Communications has been hosting and managing storage services through its 44 data centres acquired in 2013 and last year. It has a presence in the United States, Britain and Singapore, besides major Indian cities like New Delhi, Mumbai, Bengaluru, Chennai and Kolkata.
It reported a total revenue of 51.3 billion rupees in the September quarter, a 1.2 per cent increase from a year earlier. But the company is finding returns on investments slow to come by, reports said.
India is one of the fastest growing markets for cloud services in the world, estimated to grow from US$423 million (S$593 million) in 2013 to US$1.3 billion in 2017, according to research firm Gartner.
Earlier this month, Microsoft opened three data centres ahead of schedule in India, while other reports said that Amazon is expected to expand its services next year.
India has also attracted investors in its budding e-commerce sector. Last week, Temasek Holdings and a co-investor reportedly began talks to acquire a significant minority stake in online payments firm BillDesk, in a deal valued at about 10 billion rupees. Temasek had investments worth US$190 billion in India as at March, reports said.
Meanwhile, Temasek's and Mubadala Development's proposed sale in an Abu Dhabi consumer finance firm has stalled after it failed to meet shareholder expectations, Bloomberg reported.
Some interested parties have withdrawn from the sale process of Dunia Finance, Bloomberg said yesterday, quoting unnamed sources. It added that the company may instead consider an initial public offering next year.
Temasek and Mubadala did not comment on the report.
Dunia, established in 2008, offers financial products, including loans, credit cards, deposits for non-individual customers and finance for small businesses.