UPDATE 1-Thai Banpu eyes $408 mln in Indonesia unit share sale

* To sell up to 98.5 mln shares - term sheet

* To raise up to $408 mln - term sheet

* To sell at 2 to 8 pct discount from Wednesday closing price

By Janeman Latul and Harry Suhartono

JAKARTA/SINGAPORE, Sept 2 (Reuters) - Thailand's biggest coal miner, Banpu PCL Ltd BANP.BK, aims to raise up to $408 million from the sale of a stake in its Indonesian listed unit, according the term sheet seen by Reuters on Thursday.

Banpu plans to sell up to 98.5 million shares in PT Indo Tambangraya Megah (ITMG.JK) and has set the indicative price at 36,150 to 38,500 rupiah a share - a discount of between 2 to 8 percent from Wednesday's closing price of 39,300 rupiah.

The sale is expected to close on Thursday afternoon, according to three people with direct knowledge.

The company aims to sell up to 98.5 million shares, raising up to 3.678 trillion rupiah ($408.2 million), according to the sale term sheet.

Banpu, through its subsidiary Banpu Minerals, has appointed Goldman Sach (GS.N) to run the international bookbuilding while local brokerages PT Bahana Securities, PT Mandiri Sekuritas, and PT Danareksa Securities are running the domestic side.

"The demand is huge so only a small portion is left for local buyers," said one source.

Southeast Asia's biggest economy has seen a steady pick up in investor interest over the past 18 months, thanks to a combination of political stability and improving economic growth sustained by strong domestic consumption and demand for the country's abundant commodities, ranging from coal to palm oil.

The key stock index .JKSE set a new record on Aug. 26 and is up nearly threefold from its Oct. 28, 2008 low, prompting a flurry of IPO announcements from firms keen to take advantage of Indonesia's improving status.

PT Indofood CBP Sukses Makmur, a unit of giant noodle-maker Indofood Sukses Makmur (INDF.JK), on Wednesday announced a $700 million initial public offering and is set to join a flood of local listings and other share offerings tapping strong investor appetite for Indonesian assets. [ID:nSGE6800DL]

State-owned national carrier Garuda Indonesia and steel giant Krakatau Steel between them hope to raise a combined $800 million from IPOs this year.

Bank Mandiri's (BMRI.JK) rights issue could raise as much as $1.55 billion, while Bank Negara Indonesia (BBNI.JK) said on Wednesday it aimed to raise as much as $1.1 billion from a rights issue in December.[ID:nJAK63447]

Coal miner Bumi Resources (BUMI.JK) plans to spin off its non-coal mining assets, while U.S. miner Newmont Corp (NEM.N) is considering listing its local unit. [ID:nJAK211842] [ID:nJAK422020] ($1=9010 Rupiah) (Additional reporting by Fathiya Dahrul, Editing by Sara Webb)