MUMBAI (Reuters) - The government on Monday invited bids from investment banks to manage planned share sales in state-run Power Finance Corp Ltd (PFC) and Rural Electrification Corp Ltd (REC), which could raise a combined $515 million.

The government, which owns 72.8 percent in PFC and 65.64 percent in REC, plans to sell 5 percent in each, the finance ministry's divestment department said in a notice on its website.

The last date for submitting bids is Sept. 22, according to the divestment department notice. Up to three investment banks will be appointed to manage each offering.

The stake sales are part of the government's plan to raise about $10.5 billion from asset sales during the current fiscal year to March 2015 to help plug its budget deficit.

(Reporting by Aman Shah; Editing by Sumeet Chatterjee)