India to sell 5 percent stake in NTPC

MUMBAI (Reuters) - India hopes to raise around $730 million by selling about 5 percent stake in state-run power producer NTPC Ltd, as part of the government's divestment programme.

The government, which owns almost three quarters of NTPC, will sell about 412.3 million shares through an auction to institutional and retail investors on the country's two main stock exchanges, according to a company regulatory filing.

The auction will be open for funds on Tuesday and Wednesday, while individual investors can put in bids on the last day. The floor price for the auction has been set at 122 rupees a share, a discount of about 4 percent to NTPC's closing price on Monday.

The government, which had aimed to raise 685 billion Indian rupees ($10 billion) from asset sales during the year to March, has so far managed to raise less than a fifth of the target.

($1 = 68.5755 Indian rupees)

(Reporting by Devidutta Tripathy; Editing by Sunil Nair)