As per three sources close to the development, conglomerate Essar Group is going to come out with an IPO of its stake in telecom firm Vodafone Essar,

It is currently in talks with the banks and if the need be it will look for other investment options. Essar is into businesses which range from steel to shipping.

It is into partnership with British firm, Vodafone in India's third biggest mobile firm, Vodafone Essar and has 33 per cent stake in the company.

Sources revealed that talks are into their initial phase and that no bank has been appointed till now for handling the process.

Vodafone bought controlling stake in Hutchison Whampoa Ltd's mobile business in 2007. In it, Essar was a partner and because of this Essar had full authority to sell 33 per cent stake to Vodafone for $5 billion after fourth year of deal.

Or, Essar can sell its stake to Vodafone for $1-5 billion based on independent valuation. The option became open in May.

Vodafone has not given its response on the development. Essar is held by brothers Shashi and Ravi Ruia.

They were able to raise 1.27 billion pounds through London IPO.