India to Raise More Than $2.2 Billion Selling NTPC, Mathur Says

India’s government will raise more than 115 billion rupees ($2.2 billion) selling a stake in NTPC Ltd., Disinvestment Secretary Ravi Mathur said, as demand exceeded the number of shares on offer.

Investors bid for 1.33 billion shares of Asia’s second-largest electricity generator by value, compared with 783.3 million on the block, according to data on the National Stock Exchange website at the close of trading in Mumbai. The bids came in at an average price of 145.91 rupees, compared with a minimum price of 145 rupees, according to the data.

Prime Minister Manmohan Singh plans to raise 300 billion rupees this financial 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 selling 31.4 billion rupees of shares in Oil India Ltd., the nation’s second-biggest explorer, last week.

NTPC shares fell 2.5 percent to 148.05 rupees, their fifth consecutive day of losses. The stock has fallen 5.4 percent this year, compared with a 0.8 percent gain in the benchmark Sensitive Index.

Open interest, or total number of contracts outstanding, in NTCP’s February futures surged 73 percent to 16,116 at close, data compiled by Bloomberg show. Volumes in the contract more than tripled from yesterday to 24,106. Some investors initiated short positions, or bets prices will fall, on expectation the stock will decline further to at least 145 rupees, Sharekhan Ltd. analyst Abhinay Jain said by phone.

Permits Stay

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.

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.

The government will sell stakes in four companies in the year ending March 31, Mathur said. Shares may be sold in Steel Authority of India Ltd., National Aluminium Co., Rashtriya Chemicals & Fertilizers Ltd. and commodities trader MMTC Ltd. to help cut the budget deficit to 5.3 percent of gross domestic product from 5.8 percent a year earlier. The government raised train fares and diesel prices last month to help reduce the shortfall.

India 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.