The Maruti 800 is India's biggest selling car

The company produces cheap vehicles that sell well in a market where just four out of 1,000 people own a car.

Analysts had expected share prices to rise by a fifth at their trading debut, but the performance was even better than expected.

Shares by the end of trading reached 164.05 rupees each, up from the original flotation price of 125 rupees per share.

It was the most active stock on the Bombay exchange on Wednesday, with about 16 million shares changing hands, or nearly 13% of the total volume.

"[This] is a symbol of India on the move... and symbolic of India's capital market on the move," said the flotation's leading manager, Uday Kotak of Kotak Investment Banking.

Growing competition

The public share offering last month drew an enthusiastic response, with investors putting in bids for eight times the number of shares on sale.

TRANSPORT IN INDIA Indians take to the car

However, the company is feeling the pressure from new entrants such as Hyundai, Fiat, Ford and the local firm Tata.

Maruti's market share of India's 700,000-a-year new car industry has fallen to 51% from 80% five years ago.

But sales have continued to rise, thanks to the expanding market.

Indian officials say they expected the Maruti sale to kick-start other, long-standing privatisation efforts.

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

But the proposed sell-offs have met with strong resistance from workers who fear widespread job losses.