The Union Cabinet has cleared an initial public offer of 10 per cent of its equity in National Thermal Power Corporation to raise Rs 3,000 crore (Rs 30 billion), power secretary R V Shahi said on Thursday.

"NTPC should be ready for IPO in the next 2-3 months," Shahi told reporters in New Delhi.

In a bid to enable NTPC to raise its generation capacity, the government on Wednesday cleared the state-owned company's proposal to enhance its equity by Rs 400 crore (Rs 4 billion).

This would allow NTPC to increase its paid-up capital by five per cent from the present level of Rs 8,000 crore (Rs 80 billion).

The enhancement of the company's equity has been necessitated to help it to fulfil its plans to add 20000 MW of power generation capacity by 2012.