Shares in India's budget airline SpiceJet rose nearly five percent on Tuesday as the airline said foreign carriers had expressed interest in acquiring a stake.
Shares in SpiceJet, which has a 19.5 percent market share, closed up 4.75 percent at 45.85 rupees, having climbed eight percent at one stage, after it said a "few investors have evinced interest" in the company.
SpiceJet gave no names.
A Times of India report which sparked the share surge said Qatar Airways was "the most likely suitor" for the low-cost carrier, which was likely to see foreign direct investment in the current quarter to March.
But the Gulf carrier later in the day denied interest in any Indian airline until it was sure "regulations and laws are properly liberalised".
SpiceJet itself said it would be "very premature" to comment on the possibility of any fresh equity issuance or to confirm or deny the name of any specific entity.
Speculation about foreign interest in Indian carriers has been brewing since the government in September said it would allow overseas airlines to take up to a 49 percent stake in domestic operators as part of economic reforms.
Indian carriers need money to fund expansion and cut debt after several years of losses caused by fierce price battles and rising fuel costs.
Only one of India's six main scheduled carriers -- privately held low-cost carrier IndiGo -- was in profit last year, helped by a strict business plan and punctual performance.
Earlier this month loss-making private Indian carrier Jet Airways said it was in talks with Etihad Airways to sell a stake to the Abu Dhabi-based airline.
Aviation consultancy firm Centre for Aviation has said SpiceJet and fellow low-cost GoAir were the carriers "with the greatest prospect" to attract investment from a foreign airline.