"I was shocked to read a media report that I am selling the Force India Formula One team. This is completely untrue and without any basis whatsoever," Mallya, said in a statement.
"As Team Principal, I will continue to run the team and I have no plans whatsoever to exit."
Mallya also owns India's second-largest private airline Kingfisher and recently announced plans to exit the low-cost part of the airline business in the next four months and focus on the premium model to reduce debt.
The inaugural Indian Grand Prix is scheduled for Oct. 30 at the 120,000-capacity circuit on the outskirts of Delhi.
"I take great pride in having been able to put an Indian team on the Formula One World Championship grid and have worked very hard to greatly improve the performance of the team," Mallya added.
"Now that India is finally on the Formula One World Championship calendar, my commitment to Force India only gets even stronger."
Force India, whose current drivers are German Adrian Sutil and Britain's Paul Di Resta, are currently placed sixth in the constructor standings.
The team was formed in 2007 when a consortium led by Mallya and Michiel Mol bought the loss-making Spyker Formula One team and later renamed it Force India.