India's largest utility vehicles and tractor maker, Mahindra & Mahindra is expected to bid upto $400 million for troubled South Korean automaker Ssangyong Motor.

Mahindra, which had lost out to Tata Motors for Ford Motor Company's luxury brands Jaguar and Land Rover in 2008, plans to be an aggressive bidder this time around, three sources with knowledge of the matter told Reuters.

It is among six bidders shortlisted to make a bid for cash-trapped Ssangyong, which has been under court-led restructuring since early 2009. Others include Renault-Nissan alliance and Kolkata-based Ruia group.

Indian automakers, despite being part of a market that has grown 30 per cent so far this year, are looking for a presence overseas, where car prices - and profit margins - are typically higher.

Mahindra, which has cash reserves close to 20 billion rupees, has a low debt to equity ratio of 0.4, which gives it the ability to raise funds, analysts said.

In July its chief financial officer had said the company had enough funds for its immediate needs. "If a situation arises where we need more, we will have no difficulty raising it," Uday Phadke said.

"Ssangyong had a really bad year in 2009, but sales figures in the last few months have shown an improvement," said Preet Mohan Singh, sector head at investment bank Avendus Capital.

"So I don't expect too much in 2010 but in 2011, we can look at an operating profit of $200 million on topline of $2 billion. The critical part is how Mahindra will integrate it," he added.

Mahindra is aiming to be a significant player in the utility vehicles segment. "This deal, if it goes through, will strengthen the company's presence in the segment globally," said Umesh Karne, analyst with Brics Securities.

It will also give the company a manufacturing base in south-east Asia, where it doesnt have a presence now, he said.

Ssangyong exports to Russia, Europe, China, Middle-East, Africa, North and South America and the Asia-Pacific.-Reuters