MUMBAI: The country's largest power producer, NTPC, today said it has fixed the base price at Rs 201 a share for its follow-on public offer, which opens tomorrow.

"The Empowered Group of Ministers (EGoM), in its meeting held on February 1, has decided the floor price for further public offer of NTPC at Rs 201 per equity share," NTPC said in a filing to the Bombay Stock Exchange.

The government holds 89.5% stake in NTPC and it plans to dilute a 5% stake constituting 41.22 crore shares through its proposed FPO.

At the floor price, the government would mop up Rs 8,286 crore from the market.

The EGoM has also approved offering a Rs 10 per share discount to employees subscribing shares in the said offer, thereby fixing the floor price for the employees at Rs 191.

The issue closes on February 5.

This is the first public issue which is adopting the French Auction route to raise funds. Under the French Auction model, institutional buyers are free to bid above a certain floor price. The highest bidder gets preference during the allotment of shares.

NTPC's floor price was fixed at about 5 per cent discount to Monday closing on BSE.

The government, which owns 89.5 percent of NTPC, may raise as much as Rs 15,000 crore selling shares in three state-run electricity companies as part of a plan to build roads and ports. NTPC shares have declined 13 percent from a record reached on Dec. 31.

J P Morgan India, Citigroup Global Markets India, Kotak Mahindra Capital and ICICI Securities are managing the sale, according to sale documents filed by NTPC with the Securities and Exchange Board of India on Jan. 12.