TEXAS PACIFIC, the private-equity group, has joined the $15 billion auction for Hutchison Essar, the Indian mobile-phone company that is also a target for Vodafone.

Hutchison Essar, the No 4 player in the fast-growing Indian market with 22m subscribers, is now “in play” after several weeks of discussions with Blackstone, another private-equity firm. Hutchison Telecom International, part of Hong Kong’s Hutchison Whampoa group, has sought rival offers for its Indian business, which is a joint venture with Essar, a conglomerate.

Blackstone had been working on a deal with Reliance Communications, another leading Indian mobile group. Vodafone, which is being advised by UBS, formally confirmed its interest on Friday.

Private-equity sources suggested that TPG was working on its own offer for Hutch Essar. It has also reportedly proposed a bid with Maxis, a Malaysian company.

However, late on Friday, a source familiar with the state of the negotiations said that TPG was now in talks with Blackstone and Kohlberg Kravis Roberts, another top-flight American investment group. “They are seriously looking at it,” he said.

The big private-equity groups are increasingly clubbing together to finance the multi- billion-dollar transactions that have become commonplace over the past 18 months. Blackstone and KKR previously worked together, along with Apax Partners and Permira, on last year’s $15.6 billion takeover of TDC, a Danish telecoms company.

Those familiar with Hutchison’s thinking say the Hong Kong group, headed by Li Ka-shing, is not desperate to sell Hutch Essar, and will only accept a full price. Vodafone’s executives accept that a winning offer is likely to be significantly in excess of $13.5 billion.

Some commentators believe that Vodafone will struggle to justify the financial logic in buying Hutch Essar, and to demonstrate that a deal could meet its self-imposed acquisition criteria. It adopted these this year, after months of disputes with shareholders over company strategy.

Vodafone has said future acquisitions must produce returns of at least 2% more than its cost of capital. However, it will argue that its global buying power for handsets and network equipment could produce big cost savings at Hutch Essar. It is also now willing to consider network-sharing arrangements.

In addition, the undeveloped nature of the Indian mobile market offers plenty of potential for future profits. Vodafone estimates it has already made a £400m gain on its 10% stake in Bharti Tele-Ventures, India’s largest mobile operator. If Vodafone decided to acquire Hutch Essar, it would have to sell the Bharti stake, bought for £820m just over a year ago, India recently overtook China as the world’s fastest-growing mobile market. However, with only 130m mobile users in a population of 1.3 billion, there remains huge potential for growth.

Vodafone is increasingly looking to emerging markets to re-ignite its growth. Its large European business is now mature — its operations in Germany, Italy and the UK all reported small declines in revenue in its most recent half-year. In addition, the strong performance of Telsim, Vodafone’s expensively acquired Turkish business, has started to assuage the doubts about the leadership of Arun Sarin, the group’s chief executive.

Those familiar with Blackstone say the firm is irritated at the public nature of the auction now taking place for Hutch Essar. In the current optimistic investment climate, this is likely to drive prices higher.

Blackstone and Reliance are understood to have asked Citigroup and UBS to help raise the $15 billion of debt to help fund the deal. However, it is thought that UBS is no longer working with Blackstone. UBS has made it clear that it regards Vodafone as one of its most important clients.

Blackstone and TPG declined to comment.