An employee works on electric pylons at a power station in Greater Noida on the outskirts of New Delhi on June 8, 2012. Reuters

The government's 5 percent stake sale in India's largest power producer, National Thermal Power Corporation (NTPC), on Tuesday's offer for sale (OFS) got off to a bumper start, with the 'non-retail investors' quota being oversubscribed by 1.28 times, according to data on the Bombay Stock Exchange.

The government is selling over 41.22 crore shares which accounts for 5 percent of the government holding, through a two day OFS, with an option to retain oversubscription of similar amount.

On Tuesday's OFS, the government is selling over 32.98 crore shares only to institutional buyers.

The government owns stake of nearly 70 percent in NTPC. It has set a floor price of Rs 168 apiece, with the aim of raising around Rs 7,000 crore for the exchequer.

Institutional investors had placed bids for 41.2 crore (41,22,73,220) shares or 1.28 times, the BSE data shows.

The OFS issue will be open to retail investors on Wednesday, the last day of the sale.

However, in the secondary market, NTPC shares fell 3 per cent to Rs 168.15 per scrip on the BSE.

In early trade on Tuesday, NTPC shares fell more than 4 percent intraday before closing at Rs 168.50, down 2.8 percent on BSE, on equity dilution by the government.

The government has set a disinvestment target of Rs 72,500 crore in fiscal 2018. It plans to raise capital worth Rs 46,500 crore from minority stake sales, Rs 15,000 crore from strategic divestment and Rs 11,000 crore from the listing of PSU insurance companies.

So far, the government has raised around Rs 8,800 crore through disinvestment in six companies this fiscal, as well as by selling minority stake in Larsen & Toubro (L&T) through Specified Undertaking of Unit Trust of India (SUUTI), besides a share buyback.