Once the 'crown jewel' of Jasper InfoTech's (parent company of Snapdeal) portfolio, Freecharge, which until last year was the second largest mobile wallet player, has been sold to Axis Bank at almost one-tenth of the price.

According to sources in Freecharge, the deal with Axis Bank, the country's third largest private sector lender has been fixed at between $50 million and $70 million. The Kunal Bahl and Rohit Bansal led e-commerce firm bought Freecharge in April 2015, for an estimated $400 million. At that time, it was touted as the largest buyout in the Indian startup ecosystem.

The deal was finalised on Tuesday and the formal announcement would happen on Thursday. Axis Bank integrates has its own mobile wallet running by the name 'Lime' as well.

While Axis Bank has sent out a formal invitation saying that a "strategic announcement" would be made on Thursday, no one could be contacted to confirm the development so far. Both Freecharge and Snapdeal declined to comment on the issue.

According to sources in the know, Freecharge that has around 200 employees would be absorbed into Axis Bank. However, Jason Kothari, who was recently appointed as the chief executive officer (CEO) of Freecharge, would likely leave after the smooth handover of the company.

While a shift in Freecharge's base of operation to Mumbai remains uncertain, Axis continues functioning from its headquarters in Delhi and Bengaluru. The beleaguered mobile wallet recorded around 12 million transactions in April this year, according to industry analysts.

Freecharge had been on the block for some time now. According to informed sources, Kothari, was in talks with investors from US and China in an effort to sell it. PayPal was initially interested in making a sizeable investment in Freecharge but the deal could not be closed.

Kothari was brought into real estate portal Housing.com by Softbank, which held a stake in the firm, after the unceremonious exit of CEO Rahul Yadav. After Housing.com was sold to another portal, PropTiger, Kothari joined Snapdeal in January this year as the chief strategy and investment officer of the company. In March, he was also given charge of Freecharge as its CEO and board member.

Freecharge had been in talks with Paytm, PayU, MobiKwik and Flipkart for a possible stake sale. This sell off to Axis would help Softbank start the process of exiting from Snapdeal, one of its biggest investments in India. If in the next few days Flipkart's acquisition of Snapdeal happens, then the Japanese telecom major would be able to get out of its investments in Jasper Infotech will help Softbank exit Snapdeal fully.

In the last six months, Softbank has been working towards the biggest consolidation in the Indian e-commerce segment and is trying to hedge its bets with plans to buy stakes in both Tiger Global-backed Flipkart as well as Alibaba's lead investment in India, Paytm.

According to sources in Freecharge, acquiring the mobile wallet would give Axis Bank access to about 20 million mobile wallet holders of Freecharge as well around a million offline and online sellers. However, critics claim that Freecharge's largest user base is recharge customers so the number of big ticket transactions is few and far.

Axis Bank had on Tuesday, reported a 16 percent year-on-year decline in its June 2017 quarter net profit at Rs 1,306 crore. However, the lender said it expects better days ahead as non-performing assets have peaked.

Freecharge facts
Merchants: 1 million plus
Customers: 20 million
Founded in: 2010
Founders: Kunal Shah and Sandeep Tandon
Sold to Snapdeal in 2015
Deal value: $400 million
Present CEO: Jason Kothari
Investors: Tandon Group, Sequoia Capital, Sofina and Ru-Net, Tybourne Capital Management, SF-based fund Valiant Capital Management