NTPC Share Sale to Raise $2.1 Billion in Biggest Offer in a Year

India’s government will raise at least 113.6 billion rupees ($2.1 billion) selling shares in electricity generator NTPC Ltd. making it the nation’s biggest offering since March.

The government will offer 783.3 million shares, or 9.5 percent stake, to investors tomorrow at a minimum price of 145 rupees apiece, the New Delhi-based company said in a stock exchange filing today. That’s a 4.5 percent discount to the utility’s closing share price today.

Prime Minister Manmohan Singh plans to raise 300 billion rupees this fiscal year through asset sales to narrow the budget deficit and avoid a downgrade of the nation’s debt. The government has raised almost a third of that target, after raising 31.4 billion rupees from selling shares in the second-biggest explorer Oil India Ltd. last week.

NTPC shares fell 2.4 percent to 151.80 rupees in Mumbai today, the biggest decline since Nov. 23. The stock has fallen 3 percent this year, compared with a 1.1 percent gain in the benchmark Sensitive Index.

A decision to cancel permits for three coal blocks allotted to NTPC was reversed because of the “impending disinvestment” in the company, the coal ministry said last month. The three mines, located in the eastern state of Jharkhand, together hold about 650 million metric tons of coal. NTPC, which plans to add 14,500 megawatts in the five years ending March 31, 2017, may enhance the planned addition by 8,500 megawatts should the company get adequate coal supplies. NTPC has a capacity of 39,674 megawatts, the country’s biggest.

More Sales

The company, which buys all of its coal, plans to develop mines in the country to produce 37 million metric tons of the fuel annually by the year ending March 31, 2017, Chairman Arup Roy Choudhury said on Aug. 7.

India will sell shares in four other state-run companies by March 31, Disinvestment Secretary Ravi Mathur said yesterday. Stake in Steel Authority of India Ltd. and National Aluminium Co. may be offered as the government seeks to cut the budget deficit to 5.3 percent of gross domestic product this financial year from 5.8 percent last year. The government raised train fares and diesel prices last month to help reduce the shortfall.

The government raised 58.3 billion rupees selling a 10 percent stake in NMDC Ltd., India’s largest iron ore producer, in the third-biggest share sale in India in 2012, according to data compiled by Bloomberg. A sale of shares in Oil & Natural Gas Corp. in March 2012 brought the government 127.7 billion rupees.

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