UPDATE 1-India's Reliance Comm says not in talks with Zain

(Adds shares, background)

NEW DELHI, Sept 7 (Reuters) - India's Reliance Communications (RLCM.BO) is not in talks to buy a stake in Kuwaiti telecoms firm Zain (ZAIN.KW) or its African assets, a spokesman for the Indian firm said on Monday.

"We deny any such move," Gaurav Wahi, a Mumbai-based spokesman, told Reuters when asked whether India's second-ranked mobile operator was interested in Zain or its African assets.

Kuwaiti family conglomerate Kharafi Group is preparing to sell a stake in Zain (ZAIN.KW), the second-largest telecommunications firm in the Gulf, in a deal that would value the investment at $13.7 billion. ID:nL7566997].

Zain had said last month that it was in negotiations with three firms, including an Indian firm, to sell a stake in its African business, which represent about 62 percent of its customers.

Two banking sources told Reuters in August that Reliance Communications had started talks to buy Zain's African operations and was in the preliminary stage of evaluating the deal. [nDEL477805].

Shares in Reliance Communications, valued at more than $12 billion, ended up 6.6 percent at 311.60 rupees, their highest close since late June, in a Mumbai market that rose 2.1 percent. (Reporting by Devidutta Tripathy; Editing by John Mair)