Modi govt to sell up to 10% of utility NTPC in potential $2.2 billion deal

The Narendra Modi government will sell a five percent stake in NTPC through a stock market auction, with a greenshoe option to sell another five percent in a deal that could raise up to $2.2 billion.

The share sale, which will take place this week, is one of a number of partial stake sales planned to help New Delhi meet its fiscal deficit target of 3.2 percent of the gross domestic product.

The government, which owns nearly 70 percent of NTPC, said it has set a floor price of 168 rupees apiece for the auction on Tuesday and Wednesday. In the base offer to sell a 5 percent stake, it will sell up to 412.27 million shares and an equal number of shares as part of the oversubscription option, according to a regulatory filing.

The government aims to raise 725 billion rupees ($11.4 billion) through stake sales during the year to March 2018 and has raised about 93 billion rupees from such divestments so far.

The NTPC sale will be open for funds on Tuesday, while retail investors will be able to bid on Wednesday. Retail investors will receive shares at a 5 percent discount to the cut-off price.

($1 = 63.9000 Indian rupees)