Polaris Financial Technologies is a Chennai-based software services provider. The company has been in talks to NEC Corporation of Japan to sell its IT division. This was according to three people who were familiar with the talks.

Polaris was negotiating earlier with Tech Mahindra. However, the deal did not push through after disagreement over valuation and the structure of the deal. This prompted Polaris to open talks with NEC, said one of the sources.

"The deal with NEC could possibly value the services division at $400-450 million, a little higher than what Tech Mahindra was offering," another source said.

Polaris hired investment bank Axis Capital to advise the company on the sale. A Polaris spokesperson did not give any comment regarding the said discussion. NEC's global spokesperson also did not respond to an email sent by The Economic Times India.

NEC Corporation had been trying to acquire Indian firms for a while as a plan of its plan to increase revenues to USD50 billion by 2018. Polaris also had earlier discussions with global buyout funds including KKR, Blackstone and Advent International for the sale of its services division.