The Maruti 800 is India's biggest selling car

Shares in Maruti - a car-making joint venture between the Indian Government and Japan's Suzuki Motor Corporation - were oversubscribed within three hours of going on sale.

Under the offering, which closed on Thursday, the government is reducing its stake in the firm to 21% from 46%.

Indian officials said they expected the Maruti sale to kick-start other privatisation efforts.

The government's stated aim is to privatise Bharat Petroleum Corporation and National Aluminium Company by March 2004.

Biggest seller

"Encouraging sentiment [from the Maruti sale] is bound to rub off on National Aluminium and Bharat Petroleum," said Tejas Doshi, an analyst at brokerage Sushil Finance.

Reports said the Maruti sale would raise about 9.5bn rupees ($204m; �122m).

Officials quoted by Reuters news agency said 60% of the shares offered would go to financial institutions, 25% to small investors and 15% to high net-worth individuals.

The government's target is to raise 132bn rupees through privatisations by the close of the financial year, in March 2004.

Maruti makes 10 models and has 55% of the local market.