Oracle has increased the price it is willing to pay for an additional stake in i-flex, the Indian financial software vendor.

The move follows a period of sharp increases in company valuations on India's stock market, and Oracle may have felt that increasing its offer was necessary to make its offer more attractive for i-flex shareholders, analysts said.

Oracle said Thursday said it has increased its offer price to $47 (£24) per share, including interest. The company also said that it has raised to about 35% the number of shares it has agreed to buy in the pending open offer to i-flex shareholders.

It had informed the Bombay Stock Exchange (BSE) in September that it intended to acquire an additional 20% of the equity of i-flex. It already holds a 55% stake in the company. Oracle would be paying about $531 million for the additional stake. Oracle subsequently delayed the open date of the offer from 6 November to 4 December 4.

The new open offer price is a 42% premium to the £17 per share that Oracle first offered, and a 20% premium to i-flex's closing stock price on Thursday.

Indian stock markets are booming, and investor expectations are high, said a financial analyst who declined to be named. Oracle may have not found sufficient support for the offer at its earlier price, he said. The price of i-flex's shares has risen by over 52% in the last six months.

In an statement to the BSE on Friday, i-flex said that Oracle had increased the number of shares it wanted to purchase in the open offer from the earlier 16.63 million to 28.39 million, representing 34.14% of the emerging voting capital. An i-flex spokeswoman declined to comment on the new offer.

Oracle will be paying about $1.3 billion (£665m) for the additional equity if its offer sails through. The open offer closes on 23 December.