State-owned hydropower producer NHPC Ltd's $421 million share sale was subscribed 1.5 times at 1235 India time on Wednesday, according to stock exchange data.
On Tuesday, the government announced a 11.36 percent stake sale in the company to raise up to 28 billion rupees ($421.08 million).
India wants to raise 565 billion rupees from the sale of stakes in state-owned enterprises in the 2016/17 financial year. That is 19 percent lower than last year's target, which the government failed to meet.
The government set a floor price of 21.75 rupees per NHPC share for the stake sale - a 6 percent discount to the stock's closing price on Tuesday.
On Wednesday, however, the company's shares slipped below the offer price for sale, and were trading at 21.70 rupees each at 1245 India time.