Aston Resources Ltd. (AZT.AU) made a relatively lackluster debut on the Australian Securities Exchange on Tuesday, listing at A$5.97 compared to its A$5.96 issue price, showing that Australian investors are still wary of new issues.

Aston's main asset is the Maules Creek coal project which founder Nathan Tinkler bought from Rio Tinto Ltd. (RTP) subsidiary Coal & Allied Industries Ltd. (CNA.AU) for US$480 million at a time when the diversified miner was divesting non-core assets to shore up its balance sheet. The purchase was finalized in February.

It is the first major initial public offering in Australia this year, after the multi-billion float of department store Myer Holdings Ltd. (MYR.AU) in November ended up disappointing investors and a few other listings failed to perform well post listing. Investors have been skeptical of how IPOs are priced in Australia, leading German construction company Bilfinger Berger AG (GBF.XE) to pull the up to A$1.39 billion IPO of its Australian arm, Valemus, in July, sparking concerns about Aston's fate.

Aston priced its IPO in early August at a 27% discount to the A$8.20 a share it was originally hoping for, after the string of uninspiring IPOs left Australian investors wary. It raised A$380 million to repay A$250 million of debt and will put A$130 million toward its A$463 million development costs.

Investors were offered 67 million of the company's 201 million shares on issue, giving an indicative market capitalisation of A$1.2 billion for the whole company.

Underwriters secured commitments for the Aston deal in early August with Asian commodities traders Noble Group Ltd. (N21.SG) and Itochu Corp. (ITOCY) agreeing to become cornerstone investors in Aston. Noble invested A$58.8 million in Aston while Itochu invested A$33 million, a person familiar with the matter said. The group conducted a small retail offer after that.

At 0315 GMT, Aston shares were down 18 cents, or 3%, from the issue price at A$5.78.

One investment banker who asked not to be named said Aston wasn't going to be a bellwether for future IPOs because its investor base is largely institutional and because the deal is in the already hot coal sector, which doesn't make it a reflection for broad-based investor demand.

While the domestic equities market has been jittery, coal company share prices have rallied on takeover activity in recent months, including Thai miner Banpu PCL's (BANPU.TH) bid for Centennial Coal Co. (CEY.AU) and India's Adani Enterprises Ltd.'s (512599.BY) bid for a coal property owned by Linc Energy Ltd. (LNC.AU).

The company said that Aston Resources Investments, a vehicle controlled by Tinkler, holds 35% of the stock.

Funds belonging to HSBC Holdings PLC (HBC) and U.S.-based investment fund Farallon are the next biggest holders at 9.2% and 6.3%, respectively, followed by Noble's Osenco vehicle on 4.8%, agribusiness company Wilmar International Ltd.'s (F34.SG) HPRY at 3.1% and Itochu at 2.7%.

-By David Fickling, Dow Jones Newswires; +61 2 8272 4689; david.fickling@dowjones.com
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