Excavators are used to dig earth at the dam site of Kishanganga power project in Gurez, 160 km (99 miles) north of Srinagar June 21, 2012. REUTERS/Fayaz Kabli/Files

MUMBAI (Reuters) - India will sell a 11.36 percent stake in state-controlled hydropower producer NHPC NHPC.NS on Wednesday to raise 28 billion rupees ($420 million), the NewsRise news agency reported, kicking off the government's privatisation programme for this year.

The government wants to raise 565 billion rupees from the sale of stakes in state-owned enterprises in the 2016/17 financial year. That is 19 percent lower than last year’s target, which the government failed to hit.

The floor price for the NHPC stake sale is 21.75 rupees per share, NewsRise quoted a government official as saying to reporters in New Delhi. The offer is at a 6 percent discount to the company’s closing price of 23.05 rupees on Tuesday.

The government is also seeking bids from merchant bankers and brokers to manage the sale of a 10 percent stake in state energy company Oil India OILI.NS, a finance ministry statement said. (bit.ly/1VUxnTt)

($1 = 66.5175 Indian rupees)