Tata put its Port Talbot steelworks and the rest of its UK assets up for sale earlier this year and has been working with the government to find a buyer.
Up to three companies are understood to be in the running, down from seven who submitted bids at the beginning of last week.
The British government is currently locked in negotiations with Tata in India and is thought to have extended an offer of a multimillion-pound loan to the company as an incentive for Tata to hold on to the business.
The prospective buyers still being considered are understood to be commodities trader Liberty House, management buyout team Excalibur, and Leeds-based private equity fund Endless.
Both Tata Steel and the government said the sales process is still moving forward.
Earlier this week Greybull Capital completed its £1 purchase of Tata’s Scunthorpe steelworks, re-branding it as British Steel.