India's third largest carmaker, Tata Engineering and Locomotive, launched a sedan version of its lone car model on Wednesday and priced it below its competitors in a bid to grab market share.

Telco, also India's largest truck and bus maker, said in a statement the base petrol version of its Indigo sedan will carry a showroom price of Rs 435,000 in Delhi while the top end diesel model carries a tag of Rs 520,000.

That price is about Rs 40,000 cheaper than any other model in the mid-size car segment, which includes Hyundai's Accent, Ford's Ikon, Maruti's Esteem, General Motors' Opel Corsa and Fiat's Siena.

The mid-size car segment, where Telco makes its entry with the Indigo, contributes 17 per cent of India's nearly 600,000-a-year new car sales.

The automaker, part of India's second largest business conglomerate, the Tata group, had unveiled five versions of the model on Monday -- three with an 85-brake horsepower petrol engine and two with a 62-bhp turbo-diesel power train.

The Indigo is built on the Indica platform, India's first homegrown car developed entirely by Telco, which has a 23-per cent share in the premium hatchback segment.

Launched in February 1999, the car competes with models made by the local units of Suzuki Motor Corp, Hyundai and Fiat.