India is set to raise about $260 million from a sale of 5 percent stake in Power Finance Corp Ltd (PWFC.NS), after the share auction received bids for more than twice the number on offer.

New Delhi was selling about 66 million shares in Power Finance as part of a target to raise as much as $11 billion from divestment of its stakes in state-run companies this fiscal year.

The sale was subscribed more than 2.3 times, according to stock exchange data.

At the indicative price of 254.30 rupees per share, the sale would fetch the government 16.78 billion rupees ($261.24 million). Retail investors will get a 5 percent discount to the cut-off price.

Aradhana Johri, secretary at the government's disinvestment department, told reporters they had received bids worth 37.47 billion rupees for the sale. She said the actual revenue the government will raise from the sale was still being calculated.

The proceeds from the asset sale programme are critical for Finance Minister Arun Jaitley's plan to narrow the fiscal deficit to 3.9 percent of gross domestic product in the 2015/16 fiscal year that began in April.

The government has missed its divestment target for the last five years in a row.

(This news story is Reuters)

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