The company, formally called One97 Communications Ltd, plans to list in India around November and is targeting a valuation of around $25 billion to $30 billion, the report said.
The One97 board plans to meet this Friday to formally approve the IPO, according to the report.
Paytm, backed by Japan's SoftBank Group, Warren Buffett's Berkshire Hathaway Inc and China's Ant Financial, did not immediately respond to a Reuters request for comment.
Its IPO plans come at a time when the COVID-19 pandemic has fuelled demand for digital payment platforms in India, intensifying a battle for market share with Alphabet Inc's Google and Facebook Inc-owned Whatsapp Pay.
Paytm's chief executive told Reuters in January that the fintech firm could turn profitable this year and would soon look to list.
The start-up offers a digital payment platform for merchants, money transfers and bill payments across India.
($1 = 72.5550 Indian rupees)
(Reporting by Chandini Monnappa in Bengaluru; Editing by Aditya Soni)