Vedanta set to be priced within 390p to 400p range

Vedanta Resources, the mining company owned by the flamboyant Indian entrepreneur Anil Agarwal, is expected to be priced at 390p to 400p a share when it floats in London tomorrow.

At this price, which is towards the low end of the range mooted last month, the first Indian company to be listed on the London Stock Exchange will raise about £435m, giving it a market valuation of £1.1bn.

The market appeared to shrug off reports yesterday about Mr Agarwal's colourful past as investors rushed to climb on board the Vedanta bandwagon. Market sources said the offer of 110 million new shares was two times subscribed, raising the possibility that a further 16.5 million shares will be allotted.

Mr Agarwal, 51, who will speak for about 57 per cent of the company post-flotation, was vilified in front of a London employment tribunal two years ago by a former executive for "illegal and unethical" business practices.

These centred on Mr Agarwal's previous proposals to include a non-existent business in the prospectus for the planned Nasdaq float of another of his companies, Sterlite Communications, the tribunal heard.

Rajat Bhatia, the company's vice-president of mergers and acquisitions, was awarded £805,384 in compensation for being sacked "unfairly" for voicing concerns at Mr Agarwal's move, the tribunal ruled.

Vedanta's own prospectus makes scant reference to the affair, save to disclose that in March, Sterlite won an appeal against the size of the award to Mr Bhatia. "The quantum of Mr Bhatia's compensation is still subject to adjudication," it said, although it did reveal that the tribunal found Mr Agarwal's evidence to be "unreliable".

Vedanta's flotation, one of the biggest on the London market this year, marks a return to public life for Brian Gilbertson, the former BHP chief executive who achieved notoriety for receiving a £4m golden handshake after heading the Australian mining giant for just six months. Mr Gilbertson is being given 1 per cent of the company as a gift from the Agarwal family.

One mining industry watcher put the demand for Vedanta down to the current vogue for all things metallic on the stock market. "Mining is very much back in fashion, fuelled by a very strong gold price. The backdrop is very promising, plus Vedanta has some very good assets," he said.

Vedanta's key Indian asset is a majority stake in Sterlite Industries, the country's largest non-ferrous metals company.