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. The stock finally closed at HK $16.80 but dropped as low as HK $16 earlier in the day (a decrease of 5.88%).
Xiaomi had attracted a number of A-list investors to its IPO, as George Soros joined fellow billionaires Li Ka-shing, Jack Ma and Pony Ma in endorsing the IPO. It raised $4.72 billion from its IPO, making this the world's biggest new technology in four years.
The listing came, however, as escalating trade tensions between the United States and China have shaken markets over the past several weeks.
Xiaomi struggled in its debut on the Hong Kong stock market Monday morning, with its shares falling by almost 6 percent.
Despite Xiaomi's challenging debut, Reuters notes that Hang Seng - the Hong Kong stock market index - was 1.7 percent higher.
The weak pricing values the firm, which also makes internet-connected home appliances and gadgets, at about $54 billion, nearly half its original US$100 billion ambition earlier this year.
Founder Lei Jun described Xiaomi as a new species of company, pursuing a "triathlon business model" combining hardware, internet and e-commerce services.
Typically companies are valued on a multiple of profits or sales.
The HK$17 price valued the company at 39.6 times its forecast 2018 earnings, while iPhone maker Apple is trading at 16 times and Chinese social media and gaming giant Tencent Holdings at 36. The company pitches itself as going beyond devices to offer internet services, such as video streaming, although it has yet to see significant revenue in the services category.
The company is now the biggest smartphone vendor in India and is pushing into European markets including Spain and Russian Federation, though it has lost share in China recently to lower-cost rivals.