Ahead of advancing the negotiations, the budget carrier has been valued at up to Rs 1,600 crore ($350-400 million) by a leading international consultancy firm.

Asked about the new equity partner and the stage of negotiations, a company spokesperson declined to comment, saying: "As a policy, GoAir does not comment on market speculations."

With the recent round of consolidation in aviation space, such as Jet Airways-Air Sahara and Kingfisher-Deccan deals, GoAir is emerging as an attractive investment target and has received offers from an international venture capital firm, an Indian corporate and another domestic financial investor, people close to the development said.

According to a person familiar with the valuation process, the value was arrived after taking into consideration the company's business plans for the next 4-5 years, which includes a major fleet expansion plan.

The Mumbai-based airline is mulling over a new order for 20 airplanes as part of its target for a fleet size of 40 by 2012. Last year, it placed a 20-plane order with Airbus for $1.2 billion, and the next order is expected to be worth about $1.4 billion based on the catalogue price of $ 70 million of each Airbus A320 aircraft.

The valuation was done as GoAir wanted to know its current worth and standing in the market, having receiving a number of proposals for an equity stake, the sources said.

The $350-400 million valuation makes GoAir the country's third-most valued airline, jointly with SpiceJet, after Jet Airways [Get Quote] and Deccan Aviation [Get Quote]. Going by GoAir Managing

Director Jeh Wadia, the airline is unlikely to go public in the near future, despite negotiations for new equity participants.

Wadia had said in October that the company was open to equity dilution to some strategic investors. Disfavouring an IPO for at least two years, he had then said the company had received various proposals.

GoAir is part of a Wadias-controlled business conglomerate, whose group companies include Bombay Dyeing [Get Quote], Britannia Industries [Get Quote] and Bombay Burmah Trading Corp, all of which have a market value between $300-900 million.

It is the only low-fare airline based out of Mumbai, the country's financial capital, with one of the highest load factors and market share per aircraft in the industry. It is expecting to break-even by March 2008.

Among the listed firms, Jet Airways is the most valued with a market capitalisation of $2 billion, followed by Deccan Aviation at just below $1 billion. SpiceJet has a market cap of about $350 million, while that of another listed firm Jagson Airline is just about $7 million.