BENGALURU - An Indian tribunal said on Friday it put on hold insolvency proceedings initiated against media company Zee Entertainment Enterprises by a bankruptcy court over a loan default.

Shares of the company rose as much as 3.1% on the news.

The stay comes after Zee had challenged the order in National Company Law Appellate Tribunal on Thursday.

It had told the tribunal on Friday that its merger with a local unit of Japan's Sony Group Corp, will "get stuck" due to the initiation of insolvency proceedings against the Indian company.

(Reporting by Arpan Chaturvedi in New Delhi and Nallur Sethuraman in Bengaluru; Editing by Nivedita Bhattacharjee)