MUMBAI - Singapore's Changi Airport Group is in talks to buy a 26 per cent stake in the airport business of India's GVK Power & Infrastructure, the Economic Times reported.

Changi, which operates Singapore's international airport, is likely to pay between 20 billion rupees (S$488 million) and 22 billion rupees for the stake, the paper reported on Monday, citing people close to the deal.

At the top end of that range, GVK's airport business would be worth about 80 billion rupees.

GVK's shares were up 8.2 per cent at 11.90 rupees in late morning trading after rising as much as 18 per cent.

'The deal is in the final stages, and an announcement is likely to be made in January,' the newspaper quoted a person familiar with the situation as saying.

Sources said last week that GVK has been looking to raise up to US$500 million (S$647 million) to retire debt and fund operations by selling a minority stake in its Australian unit.

The company said in September it would pay US$1.26 billion to buy a majority stake in three Australian coal projects.

GVK has total debt of about 50 billion rupees, the Economic Times said. A company spokesman declined to comment on the debt or on the reported negotiations.

A Changi spokesman also declined to comment, while reiterating that the government-owned company 'considered market opportunities all the time'.

GVK owns 50.5 per cent of Mumbai's airport, which it is redeveloping at a cost of about US$2.3 billion, as well as a 43 per cent stake in Bangalore's airport. The company operates both airports.

The company also holds the first right of refusal to develop a planned international airport at Navi Mumbai, for which bids are expected to be invited next year.

The sale of an equity stake in the business would help GVK secure a partner with deep pockets ahead of the Navi Mumbai airport bid.

Shares in GVK, valued at US$330 million as of Friday's close, have slid 71 per cent so far in 2011, compared with a nearly 23 per cent decline in the main stock index.