Petroliam Nasional Berhad (Petronas) has offered INR 38 billion (USD 460 million) to buy a 20% stake in the green energy arm of India's power producer, NTPC Limited (NSEI:NTPC), in the first deal of its kind by a state-run firm, three sources told Reuters. The offer price was higher than the INR 30 billion NTPC had been expecting when it asked for expressions of interest in NTPC Green Energy Limited (NGEL) last year and was 78% above the second-highest bidder. It values the NGEL at USD 2.3 billion.

NTPC and Petronas did not immediately respond to requests for comment. The sources declined to be named as the deal is still being finalised. The deal was the first time an Indian state-run company has offered a stake in a renewable energy arm and comes as the country's renewables sector is attracting increasing foreign investment.

Petronas outbid other local firms for the stake with an offer of INR 27.52 per share, one government official, an industry source and a banker said. The second-highest bidder, REC Limited (NSEI:RECLTD), offered INR 15.47 per share, while Indraprastha Gas Limited (NSEI:IGL) placed a bid of INR 6.67 per share, the banker said. REC and IGL were also not immediately available for comment.

NTPC plans to use the proceeds from the sale to expand its non-fossil businesses. The Petronas transaction needs to be approved by the federal government.