Japan's SoftBank is leading a group of investors in talks to buy 20 percent of Micromax Informatics, an Indian smartphone maker that has challenged Samsung Electronics' leadership in the subcontinent, Reuters reported Thursday.

The stake could be purchased for as much as $1 billion, valuing the company -- based in Gurgaon, near New Delhi -- at $5 billion, Reuters reported, citing two people with knowledge of the discussions. At the lower end, existing investors could sell the 20 percent stake for about $800 million, the report said.

India had more than 950 million wireless subscribers by the end of January, but only about 150 million users own smartphones, making the country an attractive market for Samsung and Chinese rivals such as Xiaomi and Lenovo Group. India is the third-largest smartphone market in the world. During a visit to India last year, SoftBank CEO Masayoshi Son said the Japanese company could invest $10 billion in Indian ventures.

Micromax, which started out selling cheap handsets in 2008, is adding higher-end handsets to its portfolio of products. The company hired Hollywood actor Hugh Jackman as its brand ambassador to raise its profile overseas.

The company has recently created a separate brand called Yu, under which it is offering 4G smartphones that compete with Xiaomi and Lenovo in terms of hardware specifications, and offers the increasingly popular CyanogenMod Android operating system, an alternative to Xiaomi’s MiUI skin and the stock Android on Motorola Mobility’s Moto series smartphones.

Micromax is controlled by its founders. Its investors include Sequoia Capital and TA Associates, Reuters reported.