BT formed the business in partnership with Indian vehicle group Mahindra & Mahindra in 1986. It began its divestment of the company in 2010, when it sold a 5.5% stake in the business to its partner, which is now the majority owner.
According to the Financial Times, the UK telecoms group has begun discussions with banks about a share sale on the Indian stock exchange, and an announcement with further details is expected next week.
According to previous reports, BT has suggested in the past it regarded its stake in Tech Mahindra as a non-core asset, and it is thought BT will sell out entirely from the group.
BT is presently the second largest stake holder in the software company, which provides technology services to telecoms companies including BT and AT&T. Tech Mahindra has also been linked with private equity interest.
BT declined to comment on market speculation.
