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MUMBAI (Reuters) - Shares in state-run Indian Bank trimmed losses by mid morning on Thursday after falling as much as 15 percent on their debut, riding a recovery in overall market.

At 10:35 a.m., the shares were trading at 90.60 rupees on volume of 11.7 million shares, the most on the BSE whose main index pulled back 0.8 percent to 13,042 points after Wednesday's 4 percent slide.

The shares, which were sold at 91 rupees in an initial public offering, opened at 88.20 and fell to a low of 77 before bounding up to 105.

"The bank is fundamentally sound and the pricing was also attractive," said Sarika Purohit Lohra, analyst at Angel Broking. "The way the bank turned around is impressive and the current weakness is more due to the overall market conditions."

Indian shares fell sharply on Wednesday tracking a global equities sell-off in reaction to Shanghai's near 9 percent fall on Tuesday, and a budget that imposed levies on some cement and widened the tax to software services exporters.

Analysts said Indian Bank could be a long-term bet for investors since it was attractive at about 1 time its adjusted book value for fiscal 2007, compared with Corporation Bank and Canara Bank at more than 1.3 times.

Indian bank raised 7.8 billion rupees by selling 85.95 million shares to strengthen its capital base in a market where loans are growing at 30 percent annually for the last three years.

The IPO was oversubscribed 32 times, helping it price the IPO at the top end of the 77-91 rupees a share band.

SBI Capital Markets, Enam Financial Consultants, ICICI Securities and Kotak Mahindra Capital Co. Ltd. were managers to the issue.