Kingfisher Airlines shares on Wednesday jumped over 6 per cent amid reports that Mukesh Ambani-led Reliance Industries (RIL) is keen on investing in the carrier.
The energy giant has, however, termed the reports as speculative.
After surging more than 10 per cent during intra-day trade, Kingfisher stock pared some gains and closed 6.43 per cent higher at Rs 19.85 on the Bombay Stock Exchange. Kingfisher shares had gained considerably on Tuesday too.
Shares of RIL, on the other hand, settled the day 1.36 per cent lower at Rs 732.90, even as an RIL spokesman termed the stake buy reports as "baseless and speculative".
"There have been speculative media reports regarding Reliance Industries and its interest in a domestic airlines company. We reiterate that these reports are baseless and completely speculative in nature," the spokesperson said in a statement.
FULL COVERAGE:Kingfisher crisis
Shares of some other companies from Vijay Mallya-led UB group also gained substantially in a weak market on Wednesday.
McDowell Holdings surged 9.91 per cent, Mangalore Chemicals and Fertilisers was up 1.39 per cent, United Breweries Holdings went up by 1.20 per cent and United Spirits rose 0.46 per cent. However, United Breweries Ltd dropped 4.7 per cent to close at Rs 513.45.
"Kingfisher Airlines rallied on reports that billionaire Mukesh Ambani's RIL is close to buying stake in the company and may also get UB Group's 30.44 per cent stake in Mangalore Chemicals as part of the deal," Sharmila Joshi Head Equity Fairwealth Securities said.
Analysts said that expectations for an imminent government decision on allowing foreign airlines to acquire stake in domestic carriers also helped Kingfisher and other aviation stocks.
Jet Airways gained 5.3 per cent, while the third listed airline Spicejet was up 5.45 per cent at BSE.
With PTI inputs