The smartphone company opened down at HK$16.60, according to Dow Jones, which was below the initial public offering price of between HK$17 and HK$22 for the approximately 2.18 billion shares.
Xiaomi faces nearly 5% share fall in Hong Kong trading debut, indicating a disappointing pricing and a slow start in mainland China. And in an unusual display of transparency, the printed version was then left at the reception desk where reporters signed in for the company's press conference in Hong Kong.
The Chinese smartphone giant-and the world's fifth biggest smartphone maker-went public on the Hong Kong Stock Exchange on Monday, reports CNBC.
The drop came after an affordable smartphones and other gadgets maker, Xiaomi priced its IPO at a valuation of about $54 billion, far lower than its target range.
Xiaomi's IPO valued the firm, which also makes internet-connected home appliances and gadgets, at $54 billion, nearly half the $100 billion it had initially hoped for and below its more recent target of at least $70 billion.
Xiaomi CEO and co-founder Lei Jun acknowledged the unfortunate timing in a letter to employees Sunday that said, "Our IPO also comes with huge challenges and heavy responsibilities". "It's open to everybody.If you don't like the price, you can stay away". Instead, the current valuation of $46 billion essentially means the company's value remains unchanged from its last fundraising round in 2014. Razer, a maker of gaming laptops and accessories, and online car-financing provider Yixin Group trade more than 50 per cent below their November issue price.
And Jackson Wong, at Huarong International Securities, warned there could be repercussions for Hong Kong's IPO outlook, saying a tepid start for Xiaomi would suggest a weak appetite for new listings in the city.
"We are an internet firm", Xiaomi's founder and chief executive Lei Jun told the listing ceremony at the Hong Kong stock exchange.
"The debut has been pretty solid given the headwinds they've faced coming in, including the size of the deal, the newness of what they're trying to do, CDRs (Chinese depositary receipts), dual-share class voting rights and trade wars".
Potential investors also struggled to view the company as the internet play it considers itself to be, rather than as a smartphone maker - the lower-margin business that now generates most of its profits, sources said.
Its shares fell Monday even though the broader Hong Kong market was up about 1.5%.