Shares of Indian Energy Exchange Ltd (IEX) fell as much as 8.5 percent on their market debut on Monday, hurt by worries about the power trading bourse's valuation.
IEX's 10 billion rupees ($153.7 million) initial public offering was priced at 44.1 times 2016/17 price-to-earnings, higher than BSE Ltd's 24.3 times and Multi Commodity Exchange of India's 42.5 times, according to brokerage Centrum, although the exchanges have different focus areas.
"Indian Energy Exchange's market debut slump is a clear case of euphoria chasing anything that's coming in the IPO market, without factoring in valuations," said Sanjiv Bhasin, executive vice president at financial services firm IIFL.
"The price of this IPO was at a substantial premium, leaving little room for the end-investors to make a profit on listing."
The stock was trading at 1,610 rupees at 0434 GMT, down 2.4 percent from its IPO issue price of 1,650 rupees. It fell as low as 1,510.25 rupees in early trade.
The IPO was subscribed just over two times.