The board of Flipkart has agreed to sell payments unit PhonePe, which it acquired three years ago, as it looks to raise capital independently, The Times of India reported.

The decision will help Walmart, the US retail giant that bought 77 percent stake in Flipkart last year, ease pressure and pump in additional capital in the market share battle in the payments space against Paytm and Google Pay, said the report citing three sources familiar with the development.

The report said that the terms of the deal are not finalised yet and PhonePe is likely to not go ahead with an external fund-raising if it does not get the valuation it wants.

PhonePe, the paper said, is looking to raise about $1 billion and, besides private equity investors, it can also consider strategic investors as it has held exploratory discussions earlier

Walmart is likely to divest only a part of its stake in PhonePe for now and remain a majority shareholder in the company, the report said.