Satyam has started a formal auction to sell off 51 per cent of its shares, the troubled outsourcing firm announced today.

Until 12 March, investors can register their interest in participating in the competitive bidding process, along with proof of availability of funds of at least five billion rupees (£208m).

The bidding procedure will be overseen by Indian authorities, after which shortlisted investors will be given access to the company’s books under non-disclosure and non-solicitation, as well as a stand-still agreement and a " no-claims" undertaking.

According to media reports in India, IBM is already in talks with the company and is among the favourites to purchase a majority stake.

Other prospective bidders reportedly include Indian engineering multinational Larsen and Toubro, telecoms firm Spice and software services firm Tech-Mahindra.

Satyam has been forced into the move after a financial scandal where chairman Ramalinga Raju admitted to inflating profit by 50.4bn rupees (£682m) over the past seven years, causing the company's stock to plummet.