Mumbai: A $1.8 billion share sale in NTPC Ltd, India’s leading power producer, was three-quarters subscribed on its first day, with solid institutional interest offset by an anaemic response from retail investors on Wednesday.

Institutional investors bid for 1.55 times their initial allocation of 50% of the 412 million shares put on offer by the government, but the retail portion barely drew a response, one banker directly involved in the deal told Reuters.

The share sale was covered 0.77 times, the banker said.

Retail investors have been allocated 35% of the share issue. However, if that allocation is not fully subscribed the shares are sold to other investors.

Retail investors have shied away from most recent Indian share sales, including initial public offerings from JSW Energy, DB Realty and Godrej Properties, with analysts blaming rich valuations.

Demand from institutions has helped more than cover each major share sale, although some small issues have not been fully covered.

The government is selling 5% in NTPC, which generates a fifth of India’s power, the first of several planned sales this year in state-run firms such as miner NMDC, Rural Electrification Corp and Satluj Jal Vidyut.

The offering runs through Friday, and a floor price of Rs201 per share has been set.

In 2009, the government raised $1.8 billion by selling shares in NHPC and Oil India, as it sought to fund spending and drive Asia’s third-largest economy without widening a yawning fiscal deficit.

Shares in NTPC, valued at $36.8 billion, closed up 1.8% at Rs209.80 on Wednesday in a stockmarket that rose 2.1%. The shares had risen 30% in 2009, lagging an 81% jump in the benchmark.

JPMorgan, Citigroup, Kotak Securities and ICICI Securities are lead managers for the offer.