India's largest consumer electronics group has expressed an interest in acquiring Motorola's mobile phone business.

Videocon Group said it was in the early stages of evaluating a bid for the loss-making handset division and had submitted an "expression of interest" to the American company.

The group declined to say how much it is willing to pay for Motorola's mobile phone unit, which has been valued at around $3.8 billion by Merrill Lynch.

A successful acquisition would transform Videocon, which has interests spanning the manufacture of television tubes to oil exploration, into the world's third largest mobile maker. It would also mark the latest foray overseas by an Indian company, following Tata's acquisition of Land Rover and Jaguar for $2.3 billion last week.

However, there are doubts over whether Videocon could pull-off a multi-billion dollar deal. In 2006 it launched a joint bid to acquire Daewoo Electronics, the South Korean group, for about $710 million. The deal collapsed when Videocon asked for improved terms that included instalment payments over 10 years.

Motorola declined to comment on Videocon's interest.

Last week the telecoms giant succumbed to 18 months of pressure from Carl Icahn, the activist investor, when it said that it would demerge its handset business from the remainder of the group.

Greg Brown, the chief executive of Motorola, told investors that while the demerger process was at a "very early stage, with much detailed work still to be done", the board had approved the split. The transaction was expected to be completed some time next year.

Mr Brown said that the board had not finalised the terms of the new distribution of shares in the handset business, but both companies would be listed entities. The remaining business would house Motorola's networking operations.

Motorola is the world's third- biggest mobile phone handset maker, behind Nokia and Samsung. Its market share and share price have tumbled over the past year after it failed to produce another handset to match its bestselling Razr phone.

The company sold 12.2 per cent of all mobile phones worldwide in the last quarter of 2007, compared with 40 per cent for Nokia and 14 per cent for Samsung, according to IDC, the technology data experts.

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