Everstone Capital and another Korean bidder remain interested in the business according to the Times of India, but have not signed any agreements leading to more detailed discussions.
The Riverside Company was believed to be in talks to buy the stake and the Aditya Birla Group was also thought to be interested.
Avigo Capital revived plans to sell its 60 per cent stake in the business earlier this year.
Global investment bank Lincoln International has been hired to find potential buyers for the stake, which was initially expected to fetch almost $100m.
It is now believed the deal could come in at less than $65m.
The company has grown to become India’s biggest home-grown denim brand since being set up by electrical engineer Prasad Pabrekar in 1992.
Spykar had sales of more than $60m last year through 1,350 outlets, including 250 dedicated stores.
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