Hong Kong, July 9: In a disappointing start, Chinese smartphone maker Xiaomi's shares nose dropped nearly five per cent on Monday after the company debuted its IPO at the Hong Kong Exchange at the bottom end of its target range.

Xiaomi's IPO raised $4.7 billion at a valuation of about $54 billion -- far lower than was reported earlier in 2018.

Xiaomi had to price its shares at 17 Hong Kong dollars at the bottom end of its target range after trimming its offer size, the South China Morning Post reported. OnePlus 6 Red Edition to Go on Sale in US Tomorrow; India Sale on July 16.

The valuation of the eight-year-old company was cut to $54.3 billion -- about half of the $100 billion sought.

The Chinese smartphone maker had earlier aimed to raise $10 billion in an IPO that may have had valued the company at $100 billion. Mozilla’s New Browser Fenix Under Development: Report.

"With its fundraising trimmed, Xiaomi was surpassed by the $5.17 billion IPO in March by Siemens Healthineers on the Frankfurt stock exchange, ranking it as the world's largest IPO," the report added.

Xiaomi's trading debut comes at a time when global stock markets have been affected by the trade war between the US and China.

According to CNNMoney, Xiaomi CEO and co-founder Lei Jun acknowledged the unfortunate timing.

"At this critical moment in Sino-US trade relations, the global capital markets are in constant flux. Although the macroeconomic conditions are far from ideal, we believe a great company can still rise to the challenge and distinguish itself," Lei was quoted as saying.

Several investors were put off by what they see as a high valuation based on the company's claim that it is an "internet company" rather than a hardware maker.

The company is currently in the fourth position in the smartphone market globally, behind Samsung, Apple and Huawei. WhatsApp Working on New Feature to Stop Fake News.

Xiaomi, which means millet in Chinese, will use 30 per cent of its IPO proceeds to develop the ecosystem of its technology business, especially in Artificial Intelligence (AI) and the Internet of Things (IoT).

In the first quarter of 2018, Xiaomi with over 51 per cent growth was at the fifth spot in China, Counterpoint Research reported. Xiaomi was the fastest growing brand in China during the quarter.

The growth was driven by Xiaomi's expansion in the offline segment with aggressive promotions. It also refreshed its Redmi Note series and now has a very strong product portfolio in the mid-segment, giving more choice to budget-conscious consumers.

Lei in April announced that the company will forever limit the net profit margin after tax for the entire hardware sales -- including smartphones, Internet of Things (IoT) and lifestyle products -- to a maximum of five per cent.

"If the margin crosses five per cent, then we will find a way to return the excess above five per cent to our users," he said in an email to all Xiaomi employees.

(The above story first appeared on LatestLY on Jul 09, 2018 11:12 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).