Bata India is in talks with Adidas for a strategic partnership that could likely boost the German sportswear maker's presence in the south Asian country, CNBC-TV18 reported on Thursday.
Bata India's shares ended 5.3% higher, logging their best day since April 2020. Shares rose as much as 7.3% earlier in the session.
Adidas was up 1.6% at 1150 GMT.
The talks with Adidas are likely at an advanced stage with final deal contours in the works, CNBC-TV18 said on social media platform X, formerly known as Twitter.
Bata India, which is the flagship of Netherlands-based Bata BN, houses brands like Hush Puppies and Scholl and has more than 2,050 stores across the country, according to its latest annual report.
Adidas, which sells shoes and apparels, already operates standalone stores across India.
A strategic partnership would likely entail Adidas either offering its products on a wholesale basis to Bata or creating standalone "shop in shop" in Bata stores, analysts at Deutsche Bank wrote in a note.
Either of the options would benefit Adidas "in an important long-term growth market" and likely help overtake Puma as the number one sportswear brand in India, the note added.
Adidas declined Reuters' request for comment, while Bata India did not immediately respond.
In a call with analysts two weeks ago, Adidas CEO Bjorn Gulden said India is "probably the fastest-growing market in our industry going forward."
Bata India has expanded its range of sneakers to more than 500 of its stores to cater to increased demand, its annual report showed.
Sneakers continued to be a dominant category for the company as demand for athleisure footwear surged on the back of sports and adventure events, the Gurugram-based company added.