Mumbai, May 11: Mobile wallet service provider, Paytm, has signed a non-exclusive term sheet to acquire Freecharge, a digital payments wing of Snapdeal. The move comes just as the portal’s parent company is likely to get merged with its rival e-commerce site, Flipkart.Also Read - Paytm Share Price: JM Financial Gives 'Sell' Call For Stocks With Target Price Of Rs 1,240

Paytm’s deal to acquire Freecharge puts other contenders such as Mobiqwik out of the fray. A report in the ET quoted an official as having said that if successful, the deal, which is estimated between USD 45 million and USD 90 million, could be finalised in a month. However, with the agreement being non-exclusive Snapdeal is said to have approached other key players in the digital commerce space, including global giants such as PayPal. Also Read - Finally Out Of Slump? Paytm Share Price Rises 8 Per Cent. Details Here

Further, reports suggest that Paytm is in talks with Snapdeal’s largest investor, Japanese-based SoftBank, for fresh inflow of funds worth over $1.9 billion. However, it has been indicated that SoftBank’s possible investment did not have a role in the Paytm’s decision to acquire Freecharge. Also Read - Paytm Shares: Should You Sell Or Keep After Muted Listing? Know What Experts Have To Say

In its quarterly review, SoftBank indicated that its investments in startups in India had to a loss of $1.4 billion. A statement issued by SoftBank read, “(The) highly competitive e-commerce market in India has made a trend of the company’s (Snapdeal’s) business performance lower than initially anticipated. This situation caused a material decrease in net asset value of STARFISH I PTE LTD.” Starfish I Pte Ltd holds vast shares in Jasper Infotech Pvt Ltd. The latter, in turn, runs Snapdeal.

The statement further added,”This mainly resulted from recording a loss as the amount of changes in the fair value of the financial instruments at FVTPL from March 31, 2016 to March 31, 2017. Financial instruments at FVTPL included preferred shares of Jasper Infotech Private Limited and ANI Technologies Private Limited.”