According to sources, Snapdeal is expected to announce the deal in the next few days.
This will be the second largest funding in the country's booming e-commerce space, after Flipkart's USD 1 billion deal in July this year.
When contacted, Snapdeal spokesperson said: "The company does not comment on speculation."
Snapdeal has raised about USD 400 million since its inception. In May this year, the city-based firm had raised USD 100 million (about Rs 600 crore) from Temasek, BlackRock Inc, Myriad, Premji Invest and Tybourne.
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Snapdeal, which has seen 600 per cent growth year-on-year for the past two years, currently houses over 5 million products across 500 diverse categories from over 50,000 sellers.
Indian e-commerce firms, big and small, have been receiving funding and interest from private equity firms as well as industry veterans like Ratan Tata and Azim Premji.
This has further fuelled competition in the strongly contested e-commerce segment in India, which is estimated to be worth about USD 3 billion currently.
A report by consulting firm Technopak pegs the USD 2.3 billion e-tailing market to reach USD 32 billion by 2020.
Another report by consultancy firm PwC and industry body Assocham suggests that e-commerce firms are expected to spend up to USD 1.9 billion by 2017-2020 on infrastructure, logistics and warehousing.