Japanese telecom giant SoftBank is in talks to invest about $1.4 billion in One97 Communications Ltd., the parent company of India's largest digital wallet firm.
According to a report in Bloomberg, the deal is expected to value Paytm at about $7 billion.
The news of SoftBank investing in Paytm comes at a time when Indian digital wallet firms are witnessing layoffs amid squeezing of funds by foreign investors.
Last year, Patym recorded a huge rise in its user base soon after Prime Minister Narendra Modi's announced demonetisation move to scrap high value currency notes.
Interestingly, SoftBank was also an early investor in Alibaba.
ALSO READ: Seven-member board to discuss Snapdeal sellout to Flipkart today
The talks come at a time when SoftBank is working on a sale plan of e-commerce firm Snapdeal and is likely to make an announcement in the next few weeks.
SoftBank is the largest shareholder in Snapdeal, which is locked in an intense battle with Amazon India and Flipkart.
SoftBank, which has committed an investment of over $10 billion in the Indian market.
Paytm, which counts China's Alibaba as a prominent shareholder, was valued at about $5 billion last year when it had raised $60 million from Mediatek.
Also, Reliance Capital recently sold its 1 per cent stake to Alibaba for an estimated Rs 275 crore.