SHARES: Shares in Britain's biggest music, video and book retailer HMV fell heavily on their first day of trading as Britain's biggest float in nearly a year failed to hit the right note with investors.

Shares in the group - which owns Waterstone's book stores - fell 6 per cent, or 12p, to 180p in brisk trade as conditional dealings began ahead of a full listing on May 15th.

"This disappointing start shows that IPOs (initial public offerings) are still not cheap enough," said Mr Ashley Willing, a UK fund manager at Gartmore Investment Management. "They have to be more aggressively discounted to compensate for volatile market conditions."

HMV earlier priced its shares at 192 pence, near the bottom of its 190p-220p range, raising a net £351 million sterling and giving a market value of £773 million. It has said it will use the proceeds mainly to cut debt.

There was enough demand to cover the issue about twice.