SINGAPORE - Singapore budget carrier Tiger Airways, 49 percent owned by Singapore Airlines, has tapped three banks for an initial public offering expected in January, sources said on Thursday.

The IPO is earmarked to raise several hundred million dollars to help finance the purchase of 50 Airbus A320s that Tiger has ordered, two sources familiar with the deal said. The amount is, however, below the $500 million figure cited in media reports.

Citigroup and Morgan Stanley are joint book-runners and joint lead managers for the IPO, while DBS is joint lead manager.

The existing investors will stay invested, one of the sources said. It was not immediately clear if shareholders would subscribe to the offer, however. Tiger's other owners are: Singapore state investor Temasek, which holds 11 percent stake; RyanAsia, a company controlled by the founding family of Irish airline RyanAir (RYA.I), with 16 percent; and Indigo Partners LLC, an investment firm, which owns the remaining stake.

Temasek was not immediately available for comment while SIA had previously signalled an IPO would take place.

Citigroup and DBS declined comment while Morgan Stanley was not immediately available.

The new Airbus A320s, with a list price of nearly $77 million each, will increase the size of Tiger's fleet to 72 by 2016, Tiger said on its Website.

Three of the A320s will be delivered next year, raising the size of the fleet to 20 from 17 currently, another source said.

Tiger said in response to a Reuters query that an IPO is one option its shareholders are considering. At this time, no firm decision has been made (and) the company continues to review its various strategic options.

The airline was set up in 2004 and currently operates from three hubs in Singapore, Melbourne and Adelaide, serving 25 destinations across 9 countries.

(Reporting by Kevin Lim and Harry Suhartono; Editing by Anshuman Daga, John Stonestreet)