Meanwhile QwikCilver aims to reach Rs 1,000 crore in overall transactions this fiscal.

An Investment banker said "The valuation will be about two to three times the projected net income plus a premium of about 20percent as this is a strategic investment."

Early this year Flipkart and Amazon accumulated huge investments to power their growth. Flipkart has risen over $ 1.2 billion while Snapdeal rose over $ 230 million and is again set to announce another round of funding by Japan's SoftBank.

The fast-growing Indian online retail industry’s leadership position is at stake, which is estimated to reach $6 billion in size next year, according to research firm Gartner.

Experts believe that acquisitions and investments will give these fast growing companies a competitive edge.

Raja Lahiri, partner at Grant Thornton India opined that "Large online retailers in India will have to look at investing in or acquiring companies that have a potential to scale and are in niches that they are not present in".

QwikCilver, seems to have a direct knowledge of the discussions and is expected to give Amazon an edge in line with the Flipkart-Myntra combination.

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