* Heineken buys 1.3 percent, raising stake to 38.7 percent
* Vijay Mallya owns 37.4 percent
* Heineken's new shares were collateral on loan extended to UB Group -source
MUMBAI, Dec 11 (Reuters) - The Netherlands' Heineken NV has become the largest shareholder of India's United Breweries Ltd after its stake inched past that of liquor baron Vijay Mallya.
Heineken, the world's third-largest brewer, now owns 38.7 percent after buying 1.3 percent on Tuesday from Citicorp Finance India, showed data on the National Stock Exchange on Wednesday. Mallya owns 37.4 percent.
United Breweries makes Kingfisher Strong, India's biggest-selling beer, as well as London Pilsner and Kalyani Black Label.
Heineken's new shares had been pledged as collateral for a loan it extended to parent UB Group, which is controlled by Mallya, said a person with direct knowledge of the matter who declined to be identified.
Mallya, who also owns grounded Kingfisher Airlines Ltd , owed lenders about 60 billion rupees ($982.08 million) as of September. Last year, he sold the majority of United Spirits Ltd to British drinks maker Diageo PLC for $2.1 billion.
Heineken did not immediately respond to an emailed request for comment outside of business hours in Europe. A UB Group spokesman declined to comment.
In 2004, United Breweries entered into a joint venture with Scottish and Newcastle India Pvt Ltd, now owned by Heineken, to make and market a number of beverages. In 2009, it started to manufacture and distribute Heineken beer in India.
Heineken on Tuesday spent 2.8 billion rupees on 3.5 million United Breweries shares at 772.9 rupees each, exchange data showed.
On Wednesday, United Breweries shares rose as high as 4.8 percent to 813 rupees after closing 0.4 percent higher on Tuesday.