Singapore state investor Temasek Holdings is selling 1.38 percent stake in India's No. 2

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lender ICICI Bank, according to a term sheet seen by Reuters, in a deal to raise up to $303 million.

The share sale comes less than a week after Carlyle Group and Warburg Pincus took advantage of India's recent market gains to pare stakes in two financial companies in deals worth $440 million.

The Sensex is up 14 percent so far this year, mainly led by financial stocks.

Temasek held 39.83 million shares of ICICI Bank, or 3.46 percent, as of end-December, via its unit Allamanda Investments Pte, according to exchange data.

ICICI Bank's 15.9 million shares are being sold in the range of 924 rupees to 937.75 rupees each, the term sheet showed, a zero to 1.5 percent discount to its Tuesday close price.

The deal would raise 14.9 billion rupees at the top end of the price band.

Goldman Sachs is the sole bookrunner to the issue, the term sheet showed.

ICICI Bank and Temasek spokesmen declined to comment.

Temasek's move to reduce its ICICI Bank holding is part of the investor's rebalancing of financial portfolio and there could be more partial exits in other banks, sources familiar with the matter said.

About 36 percent of Temasek's portfolio was in financial services in the fiscal year that ended March 31, which could change in the months ahead under a team that includes investment bankers from UBS (UBSN.VX) and Credit Suisse.

Buyout firms that invested billions of dollars during the Indian market's boom years before the global financial crisis are widely expected to look for opportunities to cash in their holdings, with more stake sales anticipated in coming months.