New Delhi, Dec. 8: NTPC will delay the launch of its rupee denominated dollar bonds even after holding roadshows in London.

Power ministry sources said the Rs 75,000-crore state- run giant is unsure about the market reaction to any decision by the US Federal Reserve to raise interest rates later this month. Besides, European bankers have indicated that their boards may not be too happy about picking up debt in a coal-fired power utility because of environmental concerns.

A senior delegation from the UK government's treasury had followed up Prime Minister Narendra Modi's announcement made during his London trip to use the city's financial markets to raise foreign currency by issuing the rupee or masala bonds.

However, PSUs such as the Indian Railway Finance Corporation, IIFCL and NTPC have decided to wait for the Fed's decision.

NTPC was planning a $500 million bond issuance, while the Indian Railways had lined up a billion dollar offer.

The US Fed, which for years has kept its bond rates stable, may raise interest rates marginally at a review later this month. This is expected to hit investments into the emerging markets and impact the value of currencies such as the rupee against the dollar.

Though India has a solid forex reserve of $351.61 billion, it saw an erosion in value by $750 million in just one fortnight (in the second half of November) because of an appreciating dollar.

Officials said the railways bond issue may come in the last quarter of 2015-16 once the markets settled down after the US Fed interest rate hike.

However, the problem for NTPC would be the West's aversion to bonds which are seen as environmentally risky.

Though NTPC has an ambitious plan to add 10,000 megawatt of solar power, it is equally keen to set up coal-fired plants.

NTPC has an installed capacity of 45,548MW with another 23,000 MW under construction. It is also bidding for 9,500 MW of projects. Coal-fired plants have raised environmental concerns in the West.