* To sell 9.5 percent stake through auction
* Sale part of plan to cut fiscal deficit
(Adds detail, background)
By Sumeet Chatterjee
MUMBAI, Jan 25 India's plan to raise about $2
billion selling a stake in power producer NTPC Ltd
will likely take place on Feb. 7, three sources with direct
knowledge of the situation said on Friday.
The government, which owns 84.5 percent of NTPC, plans to
sell a 9.5 percent stake worth $2.3 billion at current prices
through an auction as part of efforts to cut its fiscal deficit.
A floor price for the auction will likely be announced a day
ahead of the offering, said the sources, who declined to be
named as they were not authorised to speak to the media before a
The Department of Disinvestment, responsible for handling
government sales of stakes in companies, was not available to
Earlier this month, it picked Citigroup, Deutsche Bank
, Goldman Sachs, Kotak Mahindra Capital, Morgan
Stanley, and SBI Capital Markets to run the share sale.
A marketing roadshow for NTPC, which started this week, was
expected to end next week after which the advisors will make
their recommendation on a floor price, two sources said.
Selling down its shareholding in companies is a central
plank of the government's plan to cut its fiscal deficit to 5.3
percent of GDP in the current financial year from 5.8 percent in
India's hefty fiscal deficit has triggered warnings of a
potential credit rating downgrade.
The government aims to raise 300 billion rupees ($5.6
billion) selling shares in its 2012/13 fiscal year to March.
It got a boost from a $1.1 billion issue of miner NMDC Ltd
last month. Before the NMDC share sale, the government
had raised $148 million in the current year in a process hit by
volatile markets and wrangling among government officials.
NTPC shares fell 0.6 percent to 159.35 rupees on Friday in a
positive Mumbai market.
(Editing by Dan Lalor and Tony Munroe)