The investors would get a combined 24 per cent stake in the airline if the deal succeeds, the report said citing Mallya.
Desperately strapped for cash, Kingfisher stands on the brink of collapse after nearly a week of flight cancellations and resignations by dozens of its pilots.
Kingfisher has not turned a profit since it was founded in 2005 and is carrying a debt burden of at least $1.3 billion.
Its revenue has been in decline since the end of last year. Staff are not being paid and tax bills remain outstanding.
"There's a deal offer from two Indian investors to recapitalise. We have their termsheets," the report quoted Mallya as saying.
"They are large investors and I would leave it there."
Valued about $245.4 million by the stock market, shares in Kingfisher Airlines fell 4.35 per cent on Friday to 24.20 rupees in a weak Mumbai market.
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