Shares of One97 Communications, Paytm's parent firm, on Thursday tumbled 10 per cent in morning trade following reports that Japan-based Softbank has started the process to sell a 4.5 per cent stake in the company in a block deal.

After a weak beginning, the stock further tanked 10 per cent to ₹541.30 on the BSE.

At the NSE, it fell 9.98 per cent to ₹541.40.

Softbank has started the process to sell a 4.5 per cent stake in One97 Communications for about $200 million (around ₹1,627 crore) in a block deal, according to sources.

The development comes immediately after the lock-in period for Paytm's investors to trade shares ended.

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Softbank is the second largest shareholder with a 17.5 per cent stake in the company.

According to two sources aware of the development, Softbank has offered to sell shares in the price band of ₹555 to ₹601.55 apiece that are held through its subsidiary SVF India Holdings.

Softbank expects to raise around $200 million at the lower end of the price band of ₹555.

The deal may fetch Softbank around $215 million at the upper end. Softbank had invested $1.6 billion in Paytm in the last quarter of 2017 and offloaded shares worth $220 million at the time of IPO.