ONGC's has operations in Iraq, Iran, Libya and Syria

A total of 143 million shares in Oil and Natural Gas Commission (ONGC) were bought within an hour of the offer opening, officials said.

The ONGC selloff could raise over $2bn, through what is the largest public offering of shares ever in India.

India's ruling coalition government aims to raise more than $3bn by selling shares in largely state-owned firms.

Disinvestment process

The share offer, which would reduce the government's holdings in the $20bn energy company to 74% from 84%, went on sale at a sharp 9.5% discount to the share price in the market on Wednesday.

"The issue has already been over-subscribed," one of the offering's managers told Agence France-Presse, saying bids had been made for 107% of the shares on offer.

The Bombay Stock Exchange (BSE) website said that the bids, for 153 million shares, had been received within 11 minutes of the opening of the offer.

ONGC shares were up nearly 3% and Bombay's Sensex rose 0.9% on the back of the offering.

The success of the share offering in India's national energy company is critical to the Bharatiya Janata Party (BJP)-led government's disinvestment plans before the financial year closes in March.

Earlier public share offerings in the country's largest dredger of ports, Dredging Corporation, and its largest gas transmission company, the Gas Authority of India Limited (GAIL), were also oversubscribed.

The federal government is keen to capitalise on what it calls the "feel-good factor", arising from a robust growth rate of more than 8% and a strong performance over the past six months.