The Hydro One offering, which comes in the aftermath of a sharp selloff in Canadian public markets over the summer, is set to raise less funds than the province had initially anticipated.

In a report in April, a special advisory council appointed by the government valued a 15 percent stake in the company at C$2.03 billion to C$2.25 billion. The report valued the entire company between C$13.5 billion and C$15 billion.

The IPO as it stands will only raise C$1.87 billion if it prices at the top end of a C$19 to C$21 a share range and if the bookrunners on the IPO tap an over-allotment option tied to the offering.

If the over-allotment option is not exercised, the offering is expected to raise C$1.54 billion to C$1.7 billion.

Despite the less-than-stellar valuation, the Hydro One IPO could one of the biggest initial public offerings in Canadian history. PrairieSky Royalty Ltd's (>> PrairieSky Royalty Ltd) C$1.67 billion IPO last spring is the biggest to date in the Canadian market, according to Thomson Reuters data.

Underwriters of the offering include RBC Dominion Securities (>> Royal Bank of Canada), Scotia Capital (>> Bank of Nova Scotia), BMO Nesbitt Burns (>> Bank of Montreal), CIBC (>> Canadian Imperial Bank of Commerce), TD Securities (>> Toronto-Dominion Bank), National Bank Financial (>> National Bank of Canada), Desjardins Securities, Raymond James, GMP Securities, Barclays Capital (>> Barclays PLC), Goldman Sachs (>> Goldman Sachs Group Inc) and Credit Suisse Securities (>> Credit Suisse Group AG).

(Reporting by Euan Rocha and John Tilak; Editing by Diane Craft and Tom Brown)

By John Tilak and Euan Rocha