Shares in Jet Airways plunged nearly six percent Friday on concerns over whether India's second largest private airline will clinch a stake sale to Abu Dhabi-based Etihad Airways.
Shares fell 6.19 percent before recovering slightly to close down 5.81 percent at 527.35 rupees as a media report said "fresh hurdles" had emerged in talks with the Gulf carrier over its plans to buy a stake in Jet.
"Etihad has put a host of conditions, including an option to buy up to 49 percent stake in Jet," the Business Standard said on Friday, citing an unnamed source.
The Gulf airline also wants operational control and a representation on Jet's board, the newspaper said. The Indian carrier declined to comment on the report.
Several Indian airlines have been in talks with foreign carriers after the government last year opened up the aviation sector further to allow non-Indian airlines to invest in their counterparts in the country.
Indian carriers need money to fund expansion and cut debt after years of losses caused by intense air-fare battles and rising fuel costs.
The Jet-Etihad development comes after Asia's biggest low-cost airline, AirAsia, this week announced plans for a no-frills carrier in the country with India's Tata conglomerate.
The venture awaits government and regulatory approval.