Shares of Zee Entertainment Enterprises Ltd clawed back on Monday from a 33.5 percent plunge in the previous session, after the company denied any role in demonetisation-related transactions that are being probed by an Indian watchdog.

Stock rose as much as nearly 20 percent to 382 rupees on Monday to its biggest intraday gain since Feb 2007. On Friday, shares had tanked as much as 33.5 percent to 288.30 rupees, and marked the worst intraday fall since their debut in 1995.

Last week, a news report alleged that Zee's promoter Essel Group may figure in a probe linked to demonetisation-led deposits of 300 crore rupees. However, Zee denied any involvement with the large cash deposit transactions around the time when the Indian government scrapped high-denomination currency notes, in a bid to curtail black money and corruption.

Queries from Serious Fraud Investigation Office (SFIO) were directed to Nityank lnfrapower and Multiventures Ltd, which is an independent company as already confirmed by parent conglomerate Essel Group, the television broadcasting and digital media company said.

The management further assured investors that business fundamentals of the media firm are intact and promoter stake sale and the Essel Group's stressed asset sale is on track.

Conglomerate Essel Group intended to divest up to 50 percent of their stake in Zee Entertainment to a strategic partner, the media company had said in November.

Brokerage Citi said in a note that looking ahead, the key variable for the stock remains the announcement of any strategic partnership.

While the company has maintained that the process should continue independently, it will have to monitor the situation given the stock volatility. The process appears important for the de-leveraging process of Essel Group, and perhaps, also for Zee's business long term, Citi added.

Zee said it is taking legal action against the media report.