The London firm plans to invest between $30 million and $50 million in each of the three companies, said Anil Ahuja, who heads 3i's Indian business. That will add to the $97 million 3i has invested in Indian companies since August.

3i competes with Blackstone Group, the manager of the world's biggest buyout fund, and Carlyle Group in tapping into India's $775 billion economy, which the government expects to grow as much as 10 percent a year. India's benchmark stock index has fallen about 21 percent since it peaked May 10, creating "enough interesting buys," Ahuja said.

"Now the valuations are sensible again and you'll see a lot more activity in terms of private-equity investing money," Ahuja said in an interview in Singapore, where he is based. "I expect more private-equity deals to be signed now."

3i expects returns of about 25 percent from its investments in India, Asia's fourth-biggest economy, said Ahuja, who has been managing private-equity investments since 1994.  

3i made its first investment in India in August by buying about one-third of Nimbus Communications, a Mumbai film company, for $45 million. 3i spent about $52 million buying 10 percent stakes in two companies that are part of the Sonalika Group, a Punjabi tractor and utility-vehicle manufacturer, in April, Ahuja said.   The company is now searching for targets in the health care, light engineering, media, energy and financial services industries, he said.

"India has a big domestic market, so investors are buying into the country's growth today. India's public markets are quite heated," said Kelvin Chan, a Singapore-based senior vice president at Partners Group, a manager of private equity and hedge funds. "There are opportunities, but investors have to be selective and prices have to be reasonable."

Buyout firms like 3i are facing increasing competition from hedge funds in India. Hedge funds, which tend to have lower holding periods and have higher tolerance for lower returns, may back out of private-equity investments after the market's recent volatility, Ahuja said.

"In the last six months, we've been seeing a lot of hedge funds taking positions, but I think that will disappear," Ahuja said. "A lot of the hedge funds are working on the assumption the company will get listed very quickly. That could change."  

George Soros's Quantum Fund this year acquired a 0.75 percent stake in GMR Infrastructure, a Bangalore company that builds airports, power plants and roads, for about 670 million rupees, or $14.6 million, according to preliminary sale documents. GMR plans to raise at least $200 million in an initial public offering in July, people involved in the transaction said last week.  

Farallon Capital Management, a U.S. hedge fund, will spend more than 2 billion rupees to buy stakes in two units of Indiabulls Financial Services, the Mumbai-based brokerage said in January.

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