The move is aimed at taking on Reliance Jio ahead of the festive season.
The stock gained 5.04 per cent to settle at Rs 403.40 on BSE. During the day, it soared 5.97 per cent to Rs 407.
At NSE, shares of the company jumped 4.92 per cent to close at Rs 403.55.
The stock was the biggest gainer on both the key indices during the day.
Led by the rally in the stock, the company's market valuation went up by Rs 7,735.12 crore to Rs 1,61,255.12 crore.
This is the first of multiple partnerships that the company is lining up with mobile handset manufacturers to bring such bundled 4G smartphone options to the market, Airtel said.
While Mukesh Ambani-led Reliance Jio announced in July an Internet-enabled feature phone for a refundable deposit of Rs 1,500, Airtel said its partnership brings an "affordable" 4G smartphone to the market "effectively at the price of a feature phone".
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)