CORRECTED - Debt-heavy GMR sells power stake to Malaysian utility

(Corrects fifth paragraph to remove reference on GMR helping develop Mumbai airport)

NEW DELHI (Reuters) - Malaysian utility Tenaga Nasional, backed by sovereign wealth fund Khazanah Nasional, will buy a 30 percent stake in the energy unit of indebted Indian infrastructure group GMR for $300 million in cash, the companies said on Monday.

The deal comes as most Indian power companies are struggling with softer-than-expected demand and heavy debt brought on by years of aggressive expansion, inviting pressure from lenders to divest assets to repay loans.

But the entry of a deep-pocketed foreign player like Tenaga into an economy looking to provide power to its 1.3 billion people, widens the pool of potential buyers for other Indian power companies also looking to sell stakes while expanding operations.

"India has a large and supply-constrained power market with demand spurred by economic growth and (Tenaga) will be able to capture the long-term growth of the Indian electricity market," Tenaga said in a statement. (http://bit.ly/1OaG0a0)

GMR, known for the New Delhi airport it helped develop, said it will use the proceeds from the deal to cut debt. Its net debt was 410 billion rupees ($6.15 billion) as of last year. (http://reut.rs/1UMw3B0)

GMR Energy, whose investors include Singapore-based Temasek Holdings and a consortium led by India's IDFC Bank, has an operating capacity of around 2,300 megawatts (MW) and a pipeline of around 2,330 MW more projects, mainly coal and gas-fired but also hydro and solar energy.

Tenaga said the partnership with GMR will come with "significant opportunities to further develop renewable energy assets, in particular solar", and is in-line with its five-year plan to secure new generation capacity internationally.

($1 = 66.6202 Indian rupees)

(Reporting by Krishna N. Das, editing by David Evans)