Kotak Mahindra shares, which initially surged 14 percent in their sharpest intraday gain in almost nine years on the CNBC-TV18 report, pared some gains to close up 8.8 percent following the company's statement.
The stock gained 33 percent in the past 12 months compared to an 8.3 percent gain in the S&P BSE Sensex, according to Bloomberg data.
The stock saw a surge in volumes with 10.62 lakh shares changing hands in 23,721 trades. The report further said that the Berkshire Hathway is looking to purchase the stake through promoter allotment.
Private sector lender Kotak Mahindra Bank has informed the exchanges that it is unaware of any plans by Warren Buffett-owned Berkshire Hathaway to buy a stake in it.
However, Kotak Mahindra Bank in a communication to the bourses said, "We have nothing to report to the exchanges on the said item".
Uday Kotak directly held a 29.73 percent stake in the lender as of September 30, 2018, according to data on the Bombay Stock Exchange. The total shareholding of the promoter group in the bank stands at 30.02 percent.
The central bank has rejected the means by which the Uday Kotak had lowered his stake.
The lender was asked by the Reserve Bank of India (RBI) in August to bring down its promoter Uday Kotak's share to 20 percent from the present 29.73 percent.
In November this year, Singapore's sovereign wealth fund GIC raised its stake in the lender by purchasing additional 9.56 million shares from ING Mauritius Investments 1 Ltd, a subsidiary of Dutch lender ING Bank NV, for Rs 1,079.99 crore (about $150 million) via a block deal.