Bloomberg quotes unnamed sources who have confirmed negotiations have been underway for several weeks.
A deal has yet to be finalised, with the sources saying negotiations were continuing and could yet be abandoned if the two parties do not reach an agreement.
Pininfarina has reportedly posted losses in 10 of the last 11 years, and has struggled to emerge from a financial black hole caused by Italian recessions and the Global Financial Crisis.
The designer has been responsible for some iconic Italian cars (and others) over the years, including the Ferrari 250 GT, and already has an understanding with Mahindra on SUV styling.
A Pininfarina spokesman reportedly declined to comment on the issue, saying only that the existing relationship between the two companies is strong.
Pininfarina is far from the first company Mahindra has had its eye on, with the Indian carmaker securing a majority stake in Peugeot scooters last year.
Rumours of a Saab buyout by Mahindra have been circulating for years, with the carmaker believed to be motivated by the styling and prestige boon a brand like Saab could bring.
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