RPT-Resurgere Mines shares double on debut

(Repeats story issued on Monday)

(Adds details, quotes, background, byline)

By Swati Pandey

MUMBAI, Sept 1 (Reuters) - Shares of iron ore miner Mines & Minerals Ltd (RESU.BO: Quote, Profile, Research) more-than-doubled on debut on Monday, in high volume trade, on buying interest from funds, dealers and analysts said.

The issue of 4.5 million shares, was priced at 270 rupees each, but the shares which listed marginally higher at 272.05 rupees on the BSE, set a whopping intra-day high of 562.8 rupees before ending the session at 524.3 rupees.

The share price surge in a weak market, and the trading volume, at 33 million shares on the BSE, raised eyebrows in the market given the low IPO rating for the issue and cautious brokerage recommendations due to its business model.

"I can't understand what's happening today but no way this level is justified," said Pawan Burde, senior analyst with Angel Broking, which has an "Avoid" rating on the stock on concerns of higher valuations compared with peer Sesa Goa (SESA.BO: Quote, Profile, Research) and overexposure to the spot market and volatile iron-ore prices.

CRISIL had assigned a '1/5' grade to the stock, citing the management's limited track record in the iron ore business and the fact that the company's financial returns are vulnerable to spot price movements of iron ore.

"Funds and foreigners were interested," a dealer at a Mumbai-based brokerage, who declined to be identified, said. "The company also announced a good EPS (earnings per share) target, which boosted the sentiment."