Mumbai, May 3: Shares of United Spirits (USL) finished with gains of nearly 4 per cent on reports that Diageo Plc may hike its stake in the company to 72 per cent.

On the Bombay Stock Exchange, the scrip closed 3.83 per cent, or Rs 90.10, higher at Rs 2,450.20 after gaining over 8 per cent in intra-day trades. Similarly, on the National Stock Exchange, the share gained nearly 3.50 per cent to finish at Rs 2,442.

Reports said Diageo may increase its shareholding in a phased manner for which it was exploring various options, including open market purchases.

As of March 31, 2016, Diageo held 55.06 per cent in United Spirits. In 2012 the global spirits giant had acquired a majority stake in United Spirits.

However, responding to a clarification sought by the stock exchanges, United Spirits said it was not aware of any talks of Diageo hiking its stake in the company.

From the beginning of this year, shares of United Spirits have under-performed the benchmark index - falling more than 21 per cent to Monday's close of Rs 2,360.10.

The buzz that Diageo may raise its stake in United Spirits has gathered steam since Vijay Mallya resigned as the chairman and non-executive director of the company on February 25 this year.

Under an agreement between United Spirits and Mallya, the latter will have no ongoing role at the company. However, Mallya will have the honorary title of founder emeritus - United Spirits.

A statement from United Spirits then said that this title will carry no authority, responsibility, rights or benefits within the company or its group.

Following Mallya's resignation, Mahendra Kumar Sharma, independent director and chairman of the audit committee, was appointed the chairman of United Spirits.

Under the agreement between the two, Diageo has agreed to pay $75 million to Mallya for resigning and relinquishing the rights and benefits attached to his position as chairman and non-executive director.

Of this, Diageo had paid $40 million with the balance payable in equal instalments over five years.

Mallya also signed a five-year global non-compete agreement with Diageo (excluding the UK). The agreement also contained a clause that Mallya and his affiliates will not pursue any claims against Diageo, United Spirits and their affiliates.

Moreover, Diageo has agreed that Mallya will have no personal liability to the former with regard to the findings of the inquiry by United Spirits and the qualified auditor's report for the financial year ended March 31, 2014.

Mallya, whose passport had been revoked by the Union government, resigned from the Rajya Sabha on Monday. But the Upper House has refused to accept his resignation.

He is now in the United Kingdom.