Russian mobile phone and consumer products conglomerate AFK Sistema this week is set to price London's biggest initial public offering in more than a year to value the company at about $8 billion, market sources said.

Several fund managers said the auction should finish today at 1530 GMT and that Sistema's global depositary receipts (GDRs) would be sold at between $16 and $17.25 each.

The sources said there was already enough demand to cover the offer and that trading should begin on the London Stock Exchange by the end of the week.

"The performance of MTS shares over recent weeks has helped push up the net asset value of Sistema. I would be surprised if this deal did not price north of $17," said one market source. Sistema owns half of Russia's largest mobile phone business, Mobile TeleSystems (MTS), which accounts for the bulk of Sistema's valuation. MTS shares rose to $36.71 on Friday's market close in New York from $29.75 on December 15. Sistema declined to comment. It said last week it would sell 79.6 million GDRs at $15-$19.50 apiece. At the mid-point of that range, the 16.5 per cent stake being placed would fetch £750 million and value the whole company at about $8.3 billion.

At those levels it would raise more money than any London arrival for at least a year and would have the biggest market value on listing in four years, since the international listing of mobile operator Orange in February 2001.

Sistema also may appeal to investors seeking a broader play on Russia's consumer growth than just MTS. It controls Moscow fixed-line operator MGTS and has businesses spanning technology, insurance, banking, property, retail and media sectors. Analysts say the IPO is a key test of appetite for Russian assets after investment in the country was shaken by tax scandals, notably the de facto ruin of Russia's largest firm, oil company Yukos.

Another move that has unsettled investors closer to Sistema's operations has been a disputed tax claim against rival Vimpelcom, Russia's second largest mobile phone company. Sistema, founded in 1993, has over 35 million customers.