The shares of United Spirits Ltd, led by billionaire Vijay Mallya, rose more than 10 per cent on the domestic stock exchange following reports that Diageo Ltd is looking to acquire a stake in the company.

The rally ahead of the company's annual general meeting (AGM) on Tuesday indicates that the investors are expecting fresh investments in the company by Diageo. The deal is expected to be announced in the coming month, according to several media reports.

The UB group is the promoter of the company with a 28 per cent stake. Reports show that the talks between UB group and Diageo had fallen in 2007 but were again resumed in 2012. Analysts say that UB group might be willing to sell stake in the company in order to pay for its group's debt ridden Kingfisher Airlines.

The shares of the company were trading at 9.5 per cent higher at Rs 1088.50 after touching a high of Rs 1090.80 and a low of Rs 1005 today. The shares of Kingfisher Airlines rose 3.1 percent, UB Holdings was up 3.6 percent, and United Breweries increased 4.4 percent at the time of reporting this morning.