Country's largest online retailer Flipkart today announced that it has acquired fashion portal Myntra, adding that it would invest nearly Rs. 600 crore in the fashion business in the coming months.

"It's a 100 per cent acquisition and going forward we have big plans in this segment," said Sachin Bansal, co-founder of Bangalore-based Flipkart.

Both the companies refrained from revealing the financial details of the deal but it is learned that the transaction was valued at close to $300 million, or nearly Rs. 1,800 crore.

The acquisition will give Flipkart a major boost in the fast-growing online fashion business in India. Flipkart is headquartered in Bangalore and it was set up by two ex-Amazon employees in 2007.

Myntra will still operate as a separate entity with its co-founder and CEO Mukesh Bansal joining Flipkart board and heading the fashion business. "It was very essential to keep Myntra a separate entity and preserve its culture. I'm here for the long haul and we will continue to grow in the market," Mukesh Bansal said.

Bangalore-based Myntra was established in February 2007 by four IIT alumni - Mukesh Bansal, Ashutosh Lawania, Imran Khan and Vineet Saxena.

Tiger Global Management and Accel Partners are investors in both Flipkart and Myntra. E-Commerce companies like Flipkart & Myntra are growing at 40-45 per cent annually.

The deal comes at a time when Indian online retail firms are facing tough competition from Amazon, the world's biggest online retailer, which has also started its operations in India.

According to a joint report by KPMG and the Internet and Mobile Association of India, the e-commerce market in India was worth $13 billion, or nearly Rs. 75,000 crore, in 2013. Online sale of retail goods was wroth $1.6 billion, or nearly Rs. 10,000 crore, in 2013, according to research firm Forrester.