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As many as 10 merchant bankers, including ICICI Securities and SBI Cap, had evinced interest in managing the stake sale.
"Credit Suisse and HSBC have been selected for the NHPC share sale," sources said.
The government plans to sell 11.36% of its stake in NHPC, or 120 crore shares, through an Offer for Sale (OFS) in the domestic market.
At the current market price of Rs 18.50 apiece, the stake is valued at about Rs 2,200 crore.
The government currently holds an 86.36% stake in NHPC. The hydro-power generator listed on the bourses in 2009 after the promoter divested a 5% stake and the company issued 10% fresh equity.
The paid-up equity capital of the company, as of March 31, 2012, was Rs 12,300.74 crore.
While the disinvestment department is eager to offload shares in NHPC, the Power Ministry has been asking for time, citing valuation issues.
Up to 10% of the OFS would be reserved for the company's employees and the shares would be offered to them at a 5% discount to the issue price.
The government has been using the OFS route, popularly known as the auction method, to divest its stake in PSUs that are among the top 100 companies as per market capitalisation. It plans to garner Rs 40,000 crore through disinvestment in the current fiscal.
Total disinvestment proceeds from CPSE public offers in the current financial year are Rs 1,144.55 crore, according to the department of disinvestment's website.
