Daimler was offering 25.6 million shares in India's largest vehicle maker at 737.4 to 761.3 rupees each, a discount of 4 to 7% below the stock's Monday close of 796.75 rupees, sources said.

The shares represent a 5.34% stake in the firm.

Daimler owns 5.34% of Tata Motors' ordinary shares and 4.71% on a fully diluted basis. Media reports in India had earlier speculated that the German carmaker would look to exit its long-held stake in Tata Motors.

A Daimler official declined to comment on the reported share sale and a Tata Motors spokeswoman did not have immediate comment.

Citigroup was handling the share sale in Tata Motors, which makes the world's cheapest car, the Nano, and also owns the UK-based Jaguar and Land Rover luxury brands.

Shares in Tata Motors have risen 19% since February 26 when the company posted a consolidated net profit for the second straight quarter as sales from its Jaguar and Land Rover unit recovered.

Tata Motors shares ended 0.18% higher on Monday before the share sale was revealed. Daimler shares were flat on Monday.

Car sales in India have surged in recent months and jumped by a third in February to a record as buyers rushed to beat a planned increase in taxes. The momentum is expected to continue in March before new emissions rules kick in and push up prices. (Reuters)