Shares in the country's grounded Kingfisher Airlines climbed nearly 3% on Friday on news that the stricken carrier has applied to renew its operating licence.
The move came days after Kingfisher, whose liquor baron owner Vijay Mallya has been desperately seeking investment from foreign carriers, said it aims to resume operations in a "phased manner".
Kingfisher's shares rose to Rs. 15.88 in morning trade after regulatory authorities confirmed it had applied on Thursday for the licence renewal.
An official said, however, that the application had not included the revival plan that has been demanded by regulators.
"This application needs to be made as their licence is expiring but there can be no (licence) renewal without a revival plan," the official at the Directorate General of Civil Aviation told AFP, asking not to be named.
Kingfisher, once in the country's second-largest airline by market share, could not be immediately reached for comment but it said on Monday it has come up with a full recapitalisation plan.
The firm has not flown since its planes were grounded in October by an employees' strike over unpaid wages, leading the regulator to suspend its operating licence until it comes up with a "viable" revival formula.
The airline, whose current licence expires on December 31, said last week it was in talks with investors including Abu Dhabi-based Etihad Airways.
But aviation analysts have expressed doubt whether Etihad would be interested in Bangalore-based Kingfisher given its debt load, which is estimated at $2.5 billion by the consultancy firm Centre for Asia Pacific Aviation.
Kingfisher's shares have climbed from an all-time low of Rs. 7.05 in August on investor hopes a stake sale will avert a shutdown but they are still trading at a fraction of their record 2007 peak of Rs. 334.