India's Torrent Pharmaceutical is in preliminary talks with Apollo Global Management to secure a loan of up to $1 billion to help fund a planned bid for Cipla, two people briefed on the discussions said.

Torrent is hoping to secure roughly $3 billion to $4 billion in financing for the bid for its much bigger rival, they said. Bernstein analysts have estimated that a deal for about 60% of India's No. 3 drugmaker could be worth as much as $7 billion - potentially India's largest pharma deal to date.

Torrent has also been in talks with CVC Capital Partners and Bain Capital who might become equity partners in a consortium and contribute as much as a combined $1.5 billion to the deal, sources have said.

Cipla's founding family is keen to sell their 33.4% holding, sources say, and a bid for that amount would also trigger an open offer for another 26% as per Indian regulations.

Blackstone is also interested in bidding for Cipla, sources have also said.

Apollo is considering purchasing a small part of the Cipla founding family's stake but a final decision will depend on how talks progress with Torrent, said one of the two people who declined to be identified as the talks were private.

Apollo is "quite bullish on their Asia strategy, and India in particular...both Cipla and Torrent have strong balance sheets," the person said.

Apollo and Torrent, which has yet to confirm its interest in Cipla, did not immediately respond to a request for comment. Their discussions are being reported for the first time.

Cipla and Blackstone have not commented on reports about a potential deal.

Apollo, one of the world's biggest asset managers, managed $438 billion in credit and $101 billion in private equity as of March 2023. It opened up an office in Mumbai last year and has in the recent past issued loans of around $2.5 billion to several entities including Mumbai International Airport and JSW Cement.

Foreign banks, including Morgan Stanley and Barclays , are also in talks with Torrent to extend loans and arrange financing for the deal, sources have said.

Cipla, which has a market cap of some $12 billion, is known for making the anti-allergy drug Cetirizine and generic versions of respiratory drugs Advair and Albuterol.

It competes with global majors Pfizer and Abbott , among others, in the world's most populous nation where the pharmaceutical market is expected to be worth $130 billion by 2030 from $50 billion currently.

Torrent, whose market cap is 56% lower than Cipla's, sells medicines related to diabetes, pain management and oncology and is present in more than 40 countries. (Reporting by M. Sriram and Aditya Kalra; Editing by Edwina Gibbs)