E-commerce major Flipkart is in advanced stage of discussions to raise about $800 million to further strengthen its operations in a bid to take head on the competition from American rival Amazon.
The funding, however, would come at a much lower valuation of about $8-9 billion, sources close to the development said.
The e-tailer had last raised funds in July 2015 at a valuation of $15 billion.
The sources said that the fresh round would see participation from both existing and new investors.
When contacted, a Flipkart spokesperson said: "As a company policy, we do not comment on market speculations".
Till now, Flipkart is estimated to have raised over $3 billion with investments coming in from Tiger Global, DST Global, Steadview Capital and Accel Partners.
However, the company continues to report substantial losses as it pumps in funds into building logistics infrastructure and marketing blitz.
Flipkart has also seen several investors marking down their investments a number of times in the past few months.
Earlier this month, a mutual fund managed by Morgan Stanley had marked down the value of its holding in Flipkart for the fifth straight quarter, valuing the e-commerce major at $5.37 billion.
The fresh funding would help the company stave off competition from rivals like Amazon as well as latest entrant Alibaba.
The Chinese company has been gradually increasing its stake in Indian mobile wallets and e-commerce firm Paytm and is expected to announce its formal entry into the Indian market soon.
Amazon, on the other hand, has committed an investment of $5 billion in the Indian market.