* Shares open at A$2.54, rise to A$2.68 vs A$2.55 issue price
* Weak demand from local fund managers kept float price down
* Index managers buying after missing out in IPO - analysts
* QR forecasts A$3.7 bln capital spending in next two years
(Adds fund manager, analyst comments)
By Sonali Paul
MELBOURNE, Nov 22 (Reuters) - Shares in rail-freight firm QR National , Australia's biggest float since 1997, rose 5 percent in their trading debut on Monday, overcoming an early wobble as index managers who missed out on shares in the $4 billion float piled in.
The state of Queensland, which is selling assets to cut government debt, sold a 60 percent stake in QR National, the jewel in its crown, at the weekend.
It priced the stock at A$2.55 a share, near the bottom of the offer range, with most support coming from offshore investors impressed by QR National's exposure to China.
QR National's 2,300 km of tracks transport most of the coal produced in Queensland, Australia's top coal-producing state, including tonnage carried by rival Asciano's trains. It relies heavily on hauling coal to ports for export to Asia.
Local fund managers had said the offer range was too expensive -- pricing it above QR National's closest domestic rival, ports and rail group Asciano, and well above comparable North American rail groups.
They said it was hard to justify given QR expects to borrow heavily to fund A$3.7 billion in spending on tracks and trains over the next two years to handle fast-growing coal exports and needs to cut costs to help meet its earnings forecasts.
"We're not quite sure you'd want to pay up for all the cost savings that this price implies today. They're a long way from being delivered," said John Guadagnuolo, investment manager at Aviva Investors, which did not buy QR National shares.
The shares opened at A$2.54 and climbed to a high of A$2.68, up 5 percent, outperforming a 0.6 percent rise in the broader market .
Retail investors fared even better as they received their shares at A$2.45, a 10 cent discount to the institutional price.
At a market value of A$6.4 billion, QR National entered the ranks of Australia's top 50 companies.
Australian fund managers, especially index manages, who may have hoped to buy shares at A$2.50 in the float and missed out appeared to be rushing in on Monday to buy the stock, an analyst said, based on the big lines of shares being picked up.
More than A$1 billion worth of shares traded hands in the first two hours of trading.
"It's a stock of such size you do take a risk not being in there. You don't want to be completely underexposed," said Robert Boyd, an analyst at broker Burrell & Co.
"They're probably getting themselves up to index weighting if they misjudged the bidding process a little bit."
Offshore investors latched on to the growth story, betting on booming Chinese and Indian demand for coal.
QR National has forecast its coal transport will increase by at least 28 percent by 2012 to more than 230 million tonnes.
QR's customers are the world's biggest miners, including BHP Billiton , Rio Tinto and Anglo Coal , and it is looking to expand into iron ore transport on Australia's west coast.
The float was managed by Bank of America's Merrill Lynch, Credit Suisse , Goldman Sachs , Royal Bank of Scotland and UBS . (1=1.013 Australian Dollar) (Editing by Mark Bendeich and Dhara Ranasinghe)