Xiaomi's shares started trading slightly below the initial offering price.
After a sizzling 2017, Hong Kong's tech listings are now struggling.
By contrast, China Literature Ltd, the e-book arm of Chinese gaming and social media firm Tencent Holdings, late past year raised US$1.1 billion for its Hong Kong IPO amid heavy demand, with the retail portion being 625 times oversubscribed.
Despite being one of the most anticipated Chinese technology IPOs this year, Xiaomi saw a disappointing valuation of $54 billion (€46 billion), well below its ambitious $100 billion target. This has resulted in the Hong Kong stock market, Hang Seng, falling to a nine-month low.
The IPO pricing valued the firm, which also makes internet-connected home appliances and gadgets, at about $54 billion, nearly half its original $100 billion ambition earlier this year. "It's open to everybody.If you don't like the price, you can stay away".
Analysts say a combination of concerns have weighed on Xiaomi's IPO.
Typically companies are valued on a multiple of profits or sales. 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.
The short-term share price is not as important as the long-term performance, as the general market situations are not ideal, according to Lei Jun, the founder and chairman of the Beijing-based tech firm.
Xiaomi is an internet company with smartphones and smart hardware connected by an IoT platform at its core.
The company's weak debut comes at a time when global markets have been roiled by the escalating trade clash between the United States and China.
"We are an internet company and from Day 1 we have set up a weighted voting rights structure with dual-class shares", he added.
"Without the innovation of the Hong Kong capital markets, it would be hard for us to have a chance to list publicly in Hong Kong", Lei said, according to a transcript provided by the company. The company is also making waves in Europe, where after less than two years in the market, it has become the fourth biggest smartphone seller.