A key shareholder of India's Megha Engineering & Infrastructures Ltd. is seeking to raise about $700 million from global private credit investors to buy out his uncle's stake in the company, according to people familiar with the matter, in what would be one of the nation's biggest deals this year.

A consortium of lenders including Davidson Kempner Capital Management, Elham Credit Partners and Varde Partners has begun preliminary work on the structure of the financing, the people said, asking not to be identified because the information is private. Terms haven't been finalized and discussions could still change, they said.

Billionaire PV Krishna Reddy, the managing director of Megha Engineering who now owns 57% of the company is raising the money to help finance his acquisition of the remaining 43% stake held by his uncle Pamireddy Pitchi Reddy, the executive chairman, according to one of the people. Representatives for Megha Engineering, Elham Credit Partners and Varde Partners didn't respond to Bloomberg's requests for comment. Davidson Kempner declined to comment.

If completed, it would be among India's largest private credit deals this year, and just under half of the equivalent $1.6 billion raised by conglomerate Shapoorji Pallonji Group last month. The planned deal highlights the growing role of private credit in financing large shareholder and corporate transactions in India.