SIR Richard Branson's first foray on to the stock exchange for 18 years proved a troublesome time as his Virgin Mobile business was priced significantly below expectations.

The mobile phone company was originally expected to be valued at £713m but entered the market at £500m.

Despite a promising start, which saw the share price up three per cent at 206p, the company ended the day only a penny above its 200p start price.

The listing of the UK's fifth largest mobile phone group was set against a turbulent background that has unsettled flotations planned by other companies.

Virgin Mobile's performance echoed another debut by Branston pickle-owner Premier Foods on Monday, which saw its shares start trading at the bottom of its price range.

Despite the deflated opening, Sir Richard was his usual ebullient self.

He said: "We are very happy that Virgin Mobile is floating on the London Stock Exchange, particularly given the difficult markets which have seen several other IPOs (initial public offerings) abandoned this year."

Virgin Mobile's flotation is due to raise about £125m and will fund expansion within the Virgin Group of businesses, which includes airlines, music stores and credit cards.

If investor demand is high enough, the company will add another 6.25 million shares to the 62.5 million already on offer.

Employees are expected to receive windfalls of up to £1,400 because Virgin has pledged to make a gift of free shares following the listing.

The operation employs 1,400 staff at three sites - Trowbridge, London and Daventry - and has acquired about 4.1 million customers.

Virgin Mobile was founded five years ago and differs from rivals such as Vodafone and mm02 as a "virtual operator", which uses the T-Mobile network.

About 95 per cent of its business is derived from customers buying pre-pay vouchers to top up the credit on their mobile phones.

In the year to March 31, it generated turnover of £453.3m and operating profits of £63.2m.

Although yesterday's flotation gave the company a market value of £500m, its enterprise value is £811m after taking account of £311m of debt.