NTPC Limited : India Finance Ministry Plans 9.5% Stake Sale in NTPC, May Raise up to INR131 Billion.

NEW DELHI--India's finance ministry has proposed selling a 9.5% stake in state-run power producer NTPC Ltd. to raise as much as 131 billion rupees ($2.41 billion) as part of its divestment program for this fiscal year, a senior official said Thursday.

"Our proposal will now go for inter-ministerial consultation and then to the cabinet committee on economic affairs," the finance ministry official, who didn't want to be identified, told Dow Jones Newswires. The Indian government holds an 84.50% stake in NTPC as of June 30.

Faced with a burgeoning fiscal deficit, the government is looking at all options to raise funds. It intends to raise 300 billion rupees from share sales in a clutch of state-run companies this fiscal year through March.

The official said that the power ministry had "certain reservations" on the share sale of power companies due to volatile stock markets, and the finance minister is likely to speak to the power minister on the issue. The markets though have improved in the past few weeks.

"We don't want to exclude the power sector from the government's divestment program as we are selecting companies from across the sectors in steel, mining, oil and gas," the official said. Power ministry officials couldn't be reached for immediate comment.

The proposed share sale in NTPC could be through auction.

The company's shares were up 0.3% at 166.95 rupees at 0535 GMT, giving it a market value of 1,376.58 billion rupees ($25.3 billion).

Source : 4-traders.com