India's Tata Teleservices Ltd. rallied as much as 14.79% in morning trade on Friday following reports of British telecom company Vodafone Group PLC's interest in the Indian telecom firm.

Economic Times previously reported that Vodafone is in early talks with Indian conglomerate Tata Group to buy its controlling stake in Tata Teleservices. A source told the Indian business newspaper that it is difficult to say what the outcome of the talks will be at its current stage.

The right of first refusal to Tata Group's 59.45% stake in Tata Teleservices rests with its Japanese partner NTT DoCoMo Inc. NTT DoCoMo owns a little over one-fourth of the telecom company, the report said.

But if the Japanese mobile phone operator refuses to buy out Tata Group's holding, the Indian conglomerate has the right to exercise its drag along rights. Tata Group could force NTT DoCoMo to sell shares to the buyer of its choice, Economic Times sources said.

If the transaction happens, Vodafone and Tata Teleservices combined will become India's No. 1 player in terms of subscribers. The merged group with 248 million customers will overtake rival Bharati Airtel Ltd.'s 196 million users, the report said.