Shares of Jyothy Laboratories pared much gains to rule over 2 per cent higher after rising as much as 15.74 per cent in trade on Thursday.
Nearly 1.7 million shares changed hands as of afternoon trade, more than 16 times the 30-day average.
"All indications were positive that Germany's Henkel AG would put in a bid for the Indian company, though nothing had been finalised, said Ullas Kamath, CFO, Jyothy Labs to Business Standard.
Henkel holds option to buy up to 26 per cent of Jyothy.
Option was agreed upon after Jyothy bought a majority stake in Henkel's Indian unit in 2011.