The shares of the company was seen trading at Rs 14.56, lower by 2.41% on BSE at 1.00 pm IST. It touche an intraday low of Rs 14.18 and high of Rs 15.27.
Crisis-ridden Kingfisher Airlines third revival plan also failed to convince the regulator.
However, as per reports the airline said there is no "cause for concern" as the rules allow for the renewal of a permit within two years of expiry.
While the other concern is about how the cash-strapped carrier would pay its dues to its service providers, including airport operators, aircraft lessors and oil companies.
Earlier, Shares of the rose on the roumours of Etihad Airways planning to buy a stake in the company.
Kingfisher has been cash strapped for many months now and has some flights grounded. The company has also been unable to honour its financial obligations and has defaulted on debt repayments. There have also been frequent delay in staff salaries.