Tata Group's consumer unit is in talks to buy at least 51 per cent of popular snack food maker Haldiram's but is not comfortable with the $10 billion valuation sought, two people briefed on the matter said.

If successfully concluded, a deal would see the conglomerate directly compete with Pepsi and billionaire Mukesh Ambani's Reliance Retail.

Haldiram's, a household name in India, is also talking with private equity firms including Bain Capital about the sale of a 10 per cent stake, they said.

Tata Consumer Products, which owns UK tea company Tetley and has a partnership with Starbucks in India, is negotiating the stake purchase, the sources told Reuters.

A third person with direct knowledge of the talks said Tata wanted to buy more than 51 per cent but has told Haldiram's that its "ask is very high."

The potential acquisition represents an exciting opportunity for Tata, the person said, adding: "Tata (Consumer) is seen as a tea company. Haldiram's is huge in the consumer space and has a wide market share."

Reuters reported that the sources spoke on condition of anonymity.

A spokesperson for Tata Consumer Products said it "does not comment on market speculation". Haldiram's Chief Executive Krishan Kumar Chutani and Bain declined to comment.

Family-run Haldiram's traces its origins back to a tiny shop founded in 1937 and is well-known for its crispy "bhujia" snack sold for as little as 10 rupees across mom-and-pop stores.

It has almost 13 per cent share of India's $6.2 billion savoury snack market, according to Euromonitor International. Pepsi, famous for its Lay's chips, also has around 13per cent.

Haldiram's snacks are also sold in overseas markets like Singapore and the United States. The company has around 150 restaurants selling local food, sweets and western cuisine.