Essar suffers worst IPO in eight years

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The Independent Online

India's Essar Energy stumbled in what was the London market's biggest listing since December 2007 last night, with its shares slumping by more than 7 per cent to 389.5p on their first day of trading.

The debut was the London's worst in eight years, and comes a week after the power, oil and gas company reduced its offer price to 420p per share, against an initial range of 450p to 550p per share.

At the time, the company characterized the reduction as a pragmatic move in the face of recent market volatility. The energy group, which was spun out of India's giant Essar conglomerate, raised £1.2bn from the sale of 23 per cent of Essar Energy's shares at the end of last week in a listing that puts Essar Energy on course for inclusion in the blue chip FTSE 100 index. Essar's founders, Shashi and Ravi Ruia, still hold the other 77 per cent of Essar Energy.

The group's debut, however, came as blue chips suffered their worst session since last November, with European and US shares US tumbling on worries about Greek debt.