India's Bharat Sanchar Nigam Ltd (BSNL) is still considering whether to join a consortium that is buying a 46 percent a stake in Kuwait's Zain, the chairman of the state-run telecom said on Tuesday.

Vavasi Group, a little-known Indian firm, is leading a consortium with a Malaysian businessman to buy the stake -- comprising Kuwaiti family conglomerate Kharafi Group's estimated 20 percent holding plus that of other shareholders -- in Zain, a telecom, in a deal valued at around $13.7 billion.

BSNL and another Indian state-run telecom, MTNL, have been approached to join the consortium. In a statement last week the two firms said while they were open to opportunities to expand abroad, they were yet to take a decision on the Zain deal.

"We are still looking at it," BSNL chairman Kuldeep Goyal told Reuters by telephone on Tuesday.

The Financial Express reported last week that BSNL and MTNL had "categorically rejected" the proposal from Vavasi, saying the telecoms were worried it was too small to land such a large deal.

"They (Vavasi) are a small company. But if they have an exclusive tie-up with Kharafi, then that point is going in their favour," Goyal said.

BSNL, which has cash reserves of more than $6 billion, needs the Indian government's approval to make big investments. "That stage has not come yet. First we will decide, then it will go to the ministry," Goyal said. - Reuters