By Sumeet Chatterjee
MUMBAI (Reuters) - India's plan to raise about $2 billion selling a stake in power producer NTPC Ltd
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 public announcement.
The Department of Disinvestment, responsible for handling government sales of stakes in companies, was not available to comment.
Earlier this month, it picked Citigroup
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 2011/12.
India's hefty fiscal deficit has triggered warnings of a potential credit rating downgrade.
The government aims to raise 300 billion rupees selling shares in its 2012/13 fiscal year to March.
It got a boost from a $1.1 billion issue of miner NMDC Ltd
NTPC shares fell 0.6 percent to 159.35 rupees on Friday in a positive Mumbai market.
(Editing by Dan Lalor and Tony Munroe)