Shares of Vijay Mallya-led UB Group companies on Wednesday shot up to 20 per cent amid reports that the group is looking to sell stake in United Spirits, and spirits major Diageo is in the running to pick up the stake.
Reacting to the buzz, United Breweries Holdings soared 20 per cent to Rs 70.80, while stocks of Kingfisher Airlines surged 6.29 per cent to Rs 13.85 on the BSE.
Among other group stocks, United Spirits gained 6.37 per cent to Rs 677.40 and United Breweries rose 7.18 per cent to Rs 516. Others like McDowell Holdings, Mangalore Chemicals and Fertilizers and UB Engineering rose between 4-17 per cent.
Market analysts said rumours about stake sale in United Spirits fuelled the rally in the entire group stocks.
According to reports Diageo, the world’s leading spirits, wine and beer making company, is said to be in the running to pick up USL stake, as the UB Group is looking to sell stake in USL to repay debt.
The money being raised through the stake sale will be pumped in to Kingfisher Airlines to repay the debt, it said. The airline has a debt of over Rs 7,000 crore.
Rally in these stocks sharply outperformed the sluggish broader market where the BSE benchmark index, Sensex, finished the day 17.71 points up at 16,880.51.