Indian celebrities gathered in Madrid Saturday for the "Bollywood Oscars", a star-studded award show being held in Spain for the first time that will be watched by up to 800 million people worldwide.

The award show, which celebrates the Hindi language film industry known as Bollywood, takes place in a different city outside of India every year in the hope of luring new audiences to the genre.

Indian historical epic "Bajirao Mastani" got the ball rolling on Friday at a glittering concert and fashion show, scooping nine out of 14 awards given out ahead of Saturday's shindig.

Set in the 18th century, the film -- featuring an all-star cast including actresses Priyanka Chopra and Deepika Padukone, with Ranveer Singh in the main role -- picked up the awards for choreography and best cinematography among others.

"Slumdog Millionaire" star Freida Pinto, dressed in a striking blue sleeveless dress, also collected a special award for outstanding achievement by an Indian actor in international cinema, receiving her honour from co-star Anil Kapoor.

"It is great to see so many Indians out here, it is so amazing," she said.

Shilpa Shetty, the Bollywood star who shot to fame as the winner of British reality TV show "Celebrity Big Brother", also took part, leading a yoga "masterclass".

Shetty made headlines in 2007 after a fellow Big Brother contestant mocked her name and Indian origin.

'Open our arms'

The audience was made up largely of Indians who live in Spain and elsewhere in Europe.

The crowd cheered loudly when celebrity co-host Karan Johar arm wrestled one of Bollywood's biggest stars Salman Khan, who has played a bad boy with a heart of gold in dozens of Indian blockbusters.

Khan, 50, is up for best male actor on Saturday for his role in "Bajrangi Bhaijaan", the biggest-grossing Bollywood film of 2015.

Tickets for the awards ceremony at the 5,000-seat congress centre went on sale in May at a cost of 50-225 euros, selling out in just three weeks.

Madrid city hall was illuminated with the colours of the Indian flag on Friday night ahead of the awards, which are expected to bring 15,000 extra visitors to the Spanish capital and generate 15 million euros  in revenue.

"We are very pleased to open our arms to such a deep and attractive culture as is Indian culture," Madrid mayor Manuela Carmena said at the award ceremony held earlier this week.

The broadcast of the awards attracts approximately 800 million viewers worldwide.

Launched in 2000 at the Millennium Dome in London, other cities to have hosted the glitzy event include Dubai, Bangkok, Singapore and Toronto.