(Yicai Global) Dec. 7 -- Alibaba Group Holding Ltd. [NYSE:BABA] is poised to buy more than a third of Indian e-commerce platform BigBasket for about USD300 million, the Economic Times reported.

The deal may give the Bengaluru-based company a valuation of about USD850 million. Alibaba-backed online retailer Paytm Mall will also probably invest with the two groups taking a combined stake of 35 percent to 40 percent in Supermarket Grocery Supplies Pvt Ltd.'s BigBasket.

The transaction will likely involve a primary investment of about USD220 million and USD80 million being used to buy shares from existing investors. One insider believes the parties will announce the deal soon.

The acquisition would add to a portfolio of strategic investments the Chinese megalith is building in India as it goes toe-to-toe with Amazon.com Inc. [NASDAQ:AMZN] in one of the most dynamic e-commerce markets. BigBasket will compete with Amazon as well as online retail app operator Flipkart Pvt Ltd.

Flipkart has raised USD4 billion this year and recently expanded into the online grocery market. After securing financing from investors led by Tencent Holdings Ltd. [HK:0700], the company has seen its valuation rise to USD11.6 billion.