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Shares of Allied Blenders and Distillers rose nearly 13% in debut trade on Tuesday, in line with analysts' expectations for the Indian whisky manufacturer, which makes the 'Officer's Choice' and 'Sterling Reserve' brands of whiskies.

The stock listed at 320 rupees on the National Stock Exchange, a 14% premium to its offer price of 281 rupees, before surrendering some gains. The benchmark Nifty 50 was flat.

India's $33 billion spirits market is crowded, currently dominated by Diageo-owned United Spirits and France's Pernod Ricard, which makes the popular 'Chivas Regal' whisky.

Allied Blenders' listing valued the company at 77.38 billion rupees (nearly $927 million). United Spirits, which makes the 'Johnnie Walker' brand of whisky, is the larger rival, valued at $11 billion.

Even if the shares listed at a premium, the valuations will not sustain as the stock is highly overvalued, analysts said.

Allied's price-to-earnings ratio of 4,014 is way ahead of its larger peers United Spirits and Radico Khaitan with P/E ratios at 73 and 96, respectively.

The premium listing is because there is liquidity in the market and investors are looking for new stock ideas, said Karan Taurani of Elara Capital.

The company's initial public offering, at 23 times the shares on offer, was also significantly lower than recent IPOs in June which were oversubscribed by around a hundred times.

The absence of big names as part of anchor investors in the offering and stretched valuations were among the reasons for a subdued response to the IPO, said Kranthi Bathini, director of equity strategy at Wealthmills.

($1 = 83.5075 Indian rupees)