"We have signed a term-sheet agreement...to sell a substantial minority stake in the company's film and media services division," said the source, without giving further details about the foreign investor.
The company, with a market capitalisation of about $50.8 million, plans to use the funds to primarily cut debt and for expansion.
Reliance Mediaworks has three main businesses - a theatre distribution operation under BIG Cinemas, a TV production unit under BIG Synergy, and a film and media services segment.
The film and media services business includes motion picture processing, image enhancement and restoration, animation and visual effects, and is attracting business from overseas.
Reliance Mediaworks had said in December that this division will contribute 60 percent to overall revenue in 2012-13 from about 40 per cent then.
The company also expected its overall orderbook for this division to more than double to 2 billion rupees in the current fiscal year ending March 31, 2013.
Reliance Mediaworks had said in January that its board approved separating its exhibition and film and media services businesses into subsidiaries.
Shares of the company, which ended 3.2 per cent lower on Tuesday, have plunged more than 14 per cent since the start of this year compared with an 11 per cent fall in the benchmark index.
Copyright @Thomson Reuters 2012