Real estate firm Emaar MGF Land plans to sell a 10 percent stake through an initial public offering in India, which banking sources say may raise about $1.5 billion to make it one of India's biggest listings.

The company is 40 percent owned by Dubai's Emaar Properties and Indian real estate developer MGF Development Ltd holds close to 60 percent.

 Emaar MGF said in a statement on Wednesday that it had filed a prospectus with the Indian regulator and would offer up to 117.4 million shares in the sale, including a pre-IPO placement at a price to be determined through a book-building issue.

India's market regulator takes at least a month to approve the issue, and the company was then expected to offer shares in the following three months, bankers said.

Sources close to the development said the company may raise about $1.5 billion depending on the market conditions.

The benchmark index of the Bombay Stock Exchange has hit record highs in the last six trading sessions, helping it extend this year's gains to almost 23 percent. The market rose above 17,000 points for the first time on Wednesday, one week after it first crossed 16,000 points.

"The pricing of the issue will depend on the market condition. If the market rises to 18,000 or 19,000, it is a different story altogether," a banking source said.

In July, real estate firm DLF Ltd listed after raising $2.25 billion in India's biggest IPO. Shares in DLF, India's biggest real estate developer, rose nearly nine percent on their debut, and have gained nearly 30 percent since then.

Home prices in India have dropped as much as 20 percent this year because of rising interest rates and a correction after prices had more than doubled in a few years.

This year, India's top private bank, ICICI Bank raised $4.9 billion, and HDFC Bank raised $698 million by selling American Depository Shares.

The country's biggest bank, State Bank of India, plans to raise about $2.5 billion in a share sale by the end of this year.

Emaar MGF is being advised by Enam Securities Pvt Ltd and DSP Merill Lynch Ltd, which are the global coordinaters for the issue, as well as Citigroup GLobal Markets India, Kotak Mahindra Capital Co, HSBC Securities and Capital Markets (India), JPMorgan India and Goldman Sachs (India) Securities. - Reuters