State-owned National Thermal Power Corporation said on Monday that it plans to hit the market with an initial public offering of shares representing 5 per cent of its equity by early August.

"We hope to come out with IPO for sale of 5 per cent of our equity by first fortnight of August," chairman and managing director C P Jain told reporters in New Delhi.

He said NTPC plans to appoint merchant bankers and lead managers for the issue by month end. NTPC had late last year obtained Cabinet approval for the IPO.

Jain said the draft prospectus would be filed with capital markets watchdog SEBI by May end by which time the corporation would have finalised audited accounts.

Asked whether the corporation plans to price the issue at a premium of Rs 25 per share on a face value of Rs 10, Jain said the pricing would be firmed up only after the advisors were appointed.

NTPC issue would follow a spate of public issue by power sector undertakings including recent issue by Power Trading Corporation besides another issue lined up by Power Finance Corporation.

On the resource mobilisation front, NTPC plans to raise over Rs 3,000 crore (Rs 30 billion) through bonds and borrowings.

The corporation has set a budgetary target of Rs 4,755 crore (Rs 47.55 billion) for next year, up from Rs 4,515 crore (Rs 45.15 billion) last year, which would be sourced through a mixture of internal accruals, borrowings and bonds.