The market buzz going around is that Phillip Morris, holding 36 per cent in GPI, is likely to increase its stake in the company to the majority level, ie. at least to 51 per cent. It is also believed that increase in stake by Phillip Morris could lead to reduction in stake by KK Modi and his associates, who together hold 32 per cent in the company.

On being contacted by The Financial Express, GPI officials declined to comment on the matter saying that it is for the Phillip Morris' to take a decision, and the company was not aware of it.

In the last eight trading sessions, the share price has already shot up by 37 per cent from Rs 419 on December 8 to Rs 579 on Wednesday at the Bombay Stock Exchange (BSE), while at the National Stock Exchange (NSE), the share price increased from Rs 422 to Rs 572, a rise of 36.5 per cent during the same period.

Few months back, the share used to be quoted below the Rs 400 mark with only a few hundred shares being traded. However, from the beginning of this month, not only the price had increased but volumes were also on the rise.

On an average 2,500 shares on BSE were being traded, while on NSE the average has increased sharply to over 6,000 shares. GPI, with strong cigarette brands like Four Square, Red & White and Cavenders, is the second largest cigarette company after ITC in the country.

According to market sources, the increase in stake by Phillip Morris is on the cards as FTR Holdings' - a swiss company and subsidiary of Phillip Morris - plan to set-up a fully-owned company for blending of tobacco was rejected by the government earlier this year on the grounds that the the US multinational already had a presence in India through GPI.

Analysts expect that, with the increase in stake, Phillip Morris could bring in its global cigarette brands into the country as was done by ITC last year. ITC is already manufacturing and selling 555 and Benson & Hedges brands in the country.

Phillip Morris has strong cigarette brand in Rothmans and Marlboro. Rothmans was launched in the past, but the company was not able to focus on this brand, so it had to drop the product from the market. However, Marlboro - one of the world's largest selling cigarette brands - is yet to make an entry into the country through official channels.