Flipkart is expected to make a revised offer in the next few days for buying Snapdeal, after its first proposal of USD 850 million was rejected by the Board of the smaller rival, reported PTI.
They did not wish to be identified as discussions are still on and the deal has not been signed yet.
They added that if the terms are accepted, the deal would be completed within a month or so.
When contacted, Snapdeal, SoftBank and Flipkart declined to comment.
Snapdeal's board has already rejected a takeover offer of USD 800-850 million (around Rs 5,500 crore) from Flipkart as it felt the amount undervalued the company given that the due diligence report was clean.
SoftBank, Snapdeal's largest investor, has been proactively mediating the sale for the past few months. The Board of Snapdeal also has representation from its founders (Kunal Bahl and Rohit Bansal), Nexus Venture Partners and Kalaari Capital.
Snapdeal is also engaged in separate discussions for selling Freecharge (mobile wallet operations) and Vulcan Express (logistics arm).
These deals are also likely to be closed over the next few weeks.
The deal between Snapdeal and Flipkart, if completed, would mark the biggest acquisition in the Indian e-commerce space.
One of the leading contenders in the Indian e-tailing segment, Snapdeal has seen its fortunes failing amid strong competition from Amazon and Flipkart.
Snapdeal's valuations have also plummeted from about USD 6.5 billion in February 2016. SoftBank has already written off over USD 1 billion on valuation of its investment in Snapdeal.