UPDATE 1-Malaysia Maxis to raise at least $3.2 bln in IPO

(Adds details, analyst)

* Maxis sets minimum IPO price at 4.80 rgt/shr -source

* Seals cornerstone investors at max 5.20 rgt/shr -source

* Institutional bookbuilding to open on Oct.23 -source

* Indicative price range at lower end of market estimates

* Maxis IPO to be Southeast Asia's largest since 1995

By Soo Ai Peng and Saeed Azhar

KUALA LUMPUR/SINGAPORE, Oct 21 (Reuters) - Malaysia's top telecoms firm Maxis plans to raise at least 10.8 billion ringgit ($3.21 billion) in Southeast Asia's biggest IPO in more than a decade, although the pricing was at the low end of expectations.

Maxis, the country's largest mobile phone company by market share, has set an indicative price range from 4.80 ringgit a share, according to a fund manager who has been informed about the pricing details.

Institutional book-building for the IPO, the largest ever in Malaysia, is expected to begin from Oct.23, said the fund manager.

Controlled by reclusive Malaysian billionaire Ananda Krishnan and Saudi Telecom, Maxis will place out 625 million shares to conerstone investors at a maximum price of 5.20 ringgit a share in the IPO, said a second source.

The company has roped in four cornerstone investors including Malaysia's biggest pension fund and international investors in its offering and could add "one or two more," the source said.

It also plans to add anchor investors during its book-building process, the source said.

A Maxis spokesman said the company would make an announcement at the appropriate time.

YIELD CONSTRAINT

Analysts said Maxis may have a hard time marketing the IPO because the listing does not include its fast-growing Indian and Indonesian business.

The deal is coming to market at a time when demand for IPOs has soured slightly with South Korea's POSCO Engineering & Construction (005490.KS) saying on Tuesday it would scrap its planned $926 million deal.[ID:nSEO314374]

The 4.80-5.20 ringgit price range for Maxis was at the lower end of market expectations. Local media reports had earlier speculated a price range of 4.95 ringgit to 5.50 ringgit a share.

"I won't say it's very attractive. This is just the Malaysian business," said an analyst from OSK Investment Bank. "Investors are also very mindful of the dividend yield. If the price goes above 5 ringgit, it could put a constraint on the yield."

Malaysian telcos are trading at a steep premium to their regional peers. Some fund managers have said they will most likely own a smaller portion of Maxis shares in their portfolios than the stock's actual weightage in the benchmark FTSE Bursa Malaysia KLCI.[ID:nKLR20588]

Ananda took Maxis private two years ago in a deal that valued the company at about 40 billion ringgit after making expensive acquisitions in India and Indonesia.

Maxis, once one of the most widely owned stocks by foreign investors in Malaysia, will sell 2.25 billion shares, or 30 percent of its existing share capital in the listing.

Proceeds from the listing are aimed at reducing parent Maxis Communication Bhd's debt and meeting funding requirements of its investments in India and Indonesia.

CIMB (CIMB.KL), Credit Suisse (CSGN.VX) and Goldman Sachs (GS.N) are joint-bookrunners for the IP0 and UBS (UBSN.VX), JPMorgan (JPM.N) and Nomura (8604.T) are co-bookrunners.

(Editing by Valerie Lee)