As part of the restructuring, Paytm Ecommerce will undergo a capital reduction process, with share cancellations, two people with knowledge of the discussions told ET.

ET could not immediately determine whether any share buybacks would be made as part of the capital reduction process.

“We are ready to build on the groundbreaking ONDC program of the Government of India to boost e-commerce in India. We also plan to explore opportunities in the export market. We are grateful for the support of our investors and look forward to driving sustainable growth,” a Paytm Mall spokesperson said.

The company also said Paytm Mall’s pivot to ONDC will not impact publicly listed One97 Communications.

“It should be noted that the listed company One97 Communications Limited (OCL) does not hold any direct or indirect stake in the parent entity of Paytm Mall (PEPL). PEPL is not part of the OCL group, although Paytm Ecommerce uses the Paytm brand and receives services from OCL,” the company said in a statement on Monday.

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According to Tracxn data, Alibaba owned nearly 25.6% stake in Paytm Mall, with Japanese conglomerate Softbank holding another 18% and Paytm founder Vijay Shekhar Sharma holding 8.2% stake in the entity.

ET had reported on May 12 that e-commerce companies such as Flipkart, Reliance Retail and Amazon were in talks to join the ONDC network. The network, which is still in its infancy, is being touted as a solution to break the dominance of big e-commerce companies such as Walmart-owned Flipkart and India’s Amazon.

Through ONDC, customers can access vendors on the network using any application integrated into the service. This will reduce reliance on e-commerce companies and help challenge monopolistic activities, if any, in the e-commerce sector in India.