A range of HK$17 to HK$22 for the approximately 2.18 billion shares on offer was set by the company, eventually pricing its IPO at the low-end of an indicative range on Friday.
"However, given the targeted high valuations of many new-economy IPO hopefuls and the number of IPOs going forward, it will be challenging for the market to digest all of them", Hong said.
Shares debuted at 17 Hong Kong dollars ($2.17), but rapidly fell around 6 percent by start of trading in Hong Kong.
And on Monday it ended down 1.18 percent at HK$16.80, though that was much better than in mid-morning trade, when it was briefly down nearly six percent. Its stocks opened at 16.60 HK dollars (2.11 US dollars) per share on Monday.
Chinese markets have had a rough few months, as investors worry about the intensifying trade war with the United States. Before Monday, Hong Kong's benchmark index had fallen more than 10% from early June.
Lei Jun also said, "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". The main stock market in London opened higher. It's open to everybody...
"No matter how you look at it, it's too expensive for me", said Francis Lun, chief executive officer at brokerage GEO Securities, drawing comparisons between the price-to-earnings ratio of Xiaomi and Apple. Though still the second largest IPO this year, raising a net $3.1 billion (HK$24 billion), the company has a market capitalization of $48 billion (HK$376 billion).
The company, which makes phones to rival Apple's iPhone, had hoped to hit a valuation of $100bn in the float, but is now valued at around $53bn.
"We are an internet firm". It is also the first under the city's new exchange rules permitting dual-class shares, common in the USA tech industry in an attempt to attract tech floats.
The float adds to Hong Kong's $7 billion worth of new listings this year. It is also the first under the city's new exchange rules permitting dual-class shares, common in the US tech industry in an attempt to attract tech floats.
Founder Lei Jun described Xiaomi as a new species of company, pursuing a "triathlon business model" combining hardware, internet and e-commerce services.
Xiaomi is the biggest smartphone seller in India and is making inroads in Europe.