MUMBAI (Reuters) - Fairfax India Holdings (>> Fairfax India Holdings Corp), a fund set up by Canadian investor Prem Watsa to target Indian assets, is set to take a majority stake in logistics firm National Collateral Management Services (NCMSL), two sources familiar with the matter said.

One of the sources said the deal, for a 70 to 75 percent stake in the commodities storage and services firm, could be worth $120 million to $150 million.

India's Economic Times newspaper reported earlier this month that international private equity firms including Carlyle, Bain Capital and Blackstone (>> Blackstone Group LP) had bid for a minority stake in NCMSL, whose clients include agricultural commodity trading giants Louis Dreyfus and Cargill Inc.

NCMSL chief financial officer Ashok Dhamankar declined to comment. A spokesman for Fairfax India and officials at Carlyle, Bain and Blackstone also declined to comment. The sources declined to be identified because they were not allowed to talk to the media.

Existing shareholders in NCMSL include the International Finance Corporation (IFC), an arm of the World Bank, the Indian Farmers Fertiliser Cooperative (IFFCO), the National Commodity & Derivatives Exchange (NCDEX) and several banks.

Kotak Mahindra is advising NCMSL, one of the sources said.

India's logistics sector has seen several deals recently as investors bet on an under-invested sector that needs to grow substantially to meet India's infrastructure needs, from cold chain storage to rolling stock.

"Anything to do with storage is a very fragmented sector in India. Consolidation is bound to happen," said Sandeep Upadhyay, head of logistics and infrastructure at Centrum Capital in Mumbai.

"There is a lot of room to grow. Normally logistics grow at twice (the rate) of GDP growth in India."

Hyderabad-born Watsa, whose main firm is Fairfax Financial Holdings (>> Fairfax Financial Holdings Ltd), set up Fairfax India late last year to boost the firm's investment in India. Fairfax India went public in January this year and raised more than $1 billion via its initial public offering.

(Additional reporting by Euan Rocha in Toronto; Editing by Clara Ferreira Marques and Stephen Coates)

By Abhishek Vishnoi