Larsen, India's top engineering and construction firm, is in talks with France's Schneider Electric and U.S. diversified industrial firm Eaton Corp, among others, the sources said. A deal could be sealed in the next few weeks, they added, declining to be named because the details were not public yet.
A Larsen spokesman declined to comment on the matter.
The business is expected to report revenue of 35 billion rupees ($786 million) for the fiscal year ended March, but has been facing rising cost and competitive pressures in recent quarters.
Larsen is looking to value the business at three to four times annual revenue, one of the sources told Reuters. However, sector analysts put a likely valuation at 2.5 to 3 times revenue.
Earlier this year, Larsen said it would reorganise its operations into nine businesses to simplify its structure and better manage growth.
India plans to spend $1.5 trillion in the 10 years to 2017 to revamp its infrastructure, and has also outlined plans to add generation capacity of 100,000 megawatts from 2012 to 2017, attracting global manufacturers optimistic on growth in Asia's third-largest economy.
The country aims to halve its nearly 14-percent peak-hour power deficit by the end of 2012.
Shares in the conglomerate, valued at $23.5 billion by the market, closed down 0.6 percent in a weak Mumbai market. The stock has declined 12.7 percent so far this year , compared to a 5.5 percent fall in the main stock index.