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Last Updated: Friday, 5 December, 2003, 17:31 GMT
Vedanta market debut disappoints
Vedanta is a major aluminium producer
The London Stock Exchange's second biggest public offering this year has failed to set the market alight.

Shares in Indian mining giant Vedanta Resources fell below their issue price as they began changing hands in the City on Friday.

Vedanta shares stood at 370p by the close of trade, down 20p from their issue price of 390p.

Analysts said the decline reflected heavy selling by big investors hoping to make a quick profit.

The stock market launch raised over 500m for Vedanta, India's biggest player in aluminium, copper and zinc.

The company - which has appointed former GHP Billiton boss Brian Gilbertson as chairman - plans to use the cash to improve efficiency and expand its aluminium production.

Growth opportunity

The issue price of 390p a share values Vedanta at just over 1bn ($1.7bn).

Vedanta's stock market flotation is the second biggest in London this year after that of directories group Yell, which made its market debut in July.

It is also believed to be the biggest ever by an Indian company.

Vedanta shares offer investors a chance to buy into the fast-growing Indian economy, which looks set to expand by about 7% this year.

It also gives them exposure to the booming metals market, which has been supported by strong demand from China, in the throes of rapid industrialisation.

Mining stocks have been among the best performing on the London Stock Exchange in 2003, with sector leader BHP Billiton rising by 36% since the beginning of the year.

Analysts at Numis Securities believe Vedanta shares could rise to as high as 490p.

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