Tata Group is looking for a valuation of up to $11 billion for its financial services division in what may be the largest IPO in India this year according to people familiar with the matter. Up to $2 billion could be raised by Tata Capital Ltd.'s IPO, according to people. 

According to the reports, discussions are still ongoing and specifics may change.

Last week, the board of Tata Capital authorized the listing of up to 230 million shares and an offer by current shareholders to sell their equity. Additionally, a rights issue worth up to 15.04 billion rupees ($172 million) was announced.

Despite the recent stock market downturn, India's IPO market is thriving. LG Electronics India is also planning to go public this year, with a possible $1.5 billion in proceeds. Prudential Plc has hired banks for a $1 billion IPO of its Indian subsidiary. Hyundai Motor India Ltd. held a record IPO in India last year, raising $3.3 billion. 

Tata Capital is a non-banking financial institution. These so-called shadow banks typically offer loans to customers with limited or no access to traditional banking. According to its website, Tata Capital, headquartered in Mumbai, has over 900 branches across India.