Mumbai: The Indian government plans to sell 5% of its stake in power producer NTPC Ltd, through a follow-on public offering in January, the Economic Times reported on Thursday.
“The proposal is likely to come up for approval by the Cabinet Committee on Economic Affairs at its meeting on Thursday,” the report quoted an unidentified government official, privy to the development.
At current market price, the issue will fetch the government Rs8,500 crore ($1.8 billion), the report said.
The stock closed up 0.2% at Rs209 on Wednesday. The government holds 89.5% stake in the company, which has a market cap of $36.9 billion.
NTPC had approached the market with an initial public offering in 2004.
“The details of the issue would be finalised by November and the follow-on offer may hit the market in the second half of January 2010,” the report said, quoting the official.
India plans to sell stakes in at least five state-run firms by the end of the fiscal year in March 2010, with first of the stake sales being follow-on offerings in utilities Rural Electrification Corp or NTPC, a government official had said last week.