Shares in Jet Airways rose over 7 percent in early trade on reports that it may sell stake to Etihad Airways.
The Business Standard newspaper reported, citing a government official, that Jet might raise 16 billion rupees from the sale of 24 percent stake to Etihad Airways.
Etihad's chief executive officer said on Tuesday the Abu Dhabi-based airline was in talks with Indian airlines.
"We're involved in negotiations in India," James Hogan said in an interview broadcast on Bloomberg-UTV news channel. He declined to give details.
Jet Airways has risen 65.3 percent since the start of November, as of Monday's close, on speculation that promoter shareholder is looking to sell a stake.
Shares in other carriers such as SpiceJet rose 4 percent, while Kingfisher Airlines gained 3 percent.