UPDATE 1-India Essar Grp unit to open bond deal Tues-sources

* Essar's $475 million bond sale would have greenshoe option

* Issue likely closing on Oct. 21; rated AAA by Fitch

* Final fund-raising could touch 45 billion rupees (Updates with pricing, rating details)

By Anurag Joshi

MUMBAI, Oct 5 (Reuters) - A unit of India's Essar group plans to open book-building for a zero-coupon bond issue on Tuesday to raise at least 22.5 billion rupees ($475 million), two sources with knowledge of the transaction said on Monday. The bonds to be issued by ETHL Communications Holdings Ltd ESSR.BO would have an unspecified greenshoe option, said the sources, who spoke on condition of anonymity.

"The issue would be sold through the book-building method. The bonds mature in July 2011 and December 2011," one source told Reuters, adding that the total issue size could touch 45 billion rupees.

The issue was likely to close on Oct. 21, the sources said.

The indicative yield range for the pricing for the July 2011 bonds was 8.50 to 9.50 percent, and 8.75-9.75 percent for the December 2011 bonds, the sources said.

The bond issues are rated "AAA" by Fitch Ratings.

Barclays (BARC.L) is the lead arranger to the transaction. The other arrangers are Deutsche Bank (DBKGn.DE), JPMorgan (JPM.N) and Standard Chartered (STAN.L), the two sources said.

ETHL Communications holds part of the Essar Group's minority stake in Vodafone Essar Ltd (VOD.L), India's third-largest mobile operator. Vodafone Essar is majority owned by Britain's Vodafone Plc (VOD.L).

The bonds are backed by receivables under a put option agreement for Essar's 10.97 percent equity stake in Vodafone Essar. Fitch said Vodafone's obligations in the put option linked the credit of the bonds to that of the British telecom firm. ($1=47.5 Indian rupees) (Editing by John Mair)