BANGALORE: Talks are at a fairly advanced stage that a stake of $550 million in Indian online payments platform One97 Communications being bought by China’s Alibaba Group Holding Ltd and its Alipay, said one source.

The edge of the month expects an announcement of Alibaba’s investment. This deal would mark world’s largest e-commerce company -Alibaba’s first remarkable investment in online commerce market in India. The deal would provide a hold of 30-40 percent of One97 Communications to Alibaba and Alipay once the investment is made.

Reportedly One97, owning e-commerce platform Paytm, would be issuing new shares to Alibaba and Alipay thereby diluting holdings of the existing shareholders in the company which include SAIF Partners, Intel Capital and SAP Ventures.

The deal would focus on enlarging the services of Paytm in order to capture the rapidly growing e-commerce market in India. Alibaba denied commenting on the matter maintaining the confidentiality of the deal. However, One97 would deliver an announcement once it has finished the procedure of raising money, one source said.

India’s e-commerce is witnessing its rapid growth stage ushering more global investors. Investors from abroad like Japan’s SoftBank Corp and Temasek Holdings Pvt Ltd [TEM.UL] has invested billions in India’s online business segment.

Reportedly, SoftBank Corpis expected to invest $10 billion in the flourishing e-commerce in Inda in October this year.

 India is expected to reach an estimate of $43 billion in the next five years according to Nomura’s research last in July last year.

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