MUMBAI - Shares of Hindustan Aeronautics Ltd (HAL) fell more than 5 percent in their market debut on Wednesday after the state-run military aircraft maker's 41.13 billion rupee ($633.35 million) initial public offering last week.
HAL, which was fully owned by the government before the IPO, saw a tepid response for its offering that was subscribed 99 percent.
Brokerage ICICI Securities, a unit of India's third-biggest lender ICICI Bank, scaled back the size of its IPO on Monday and raised a lower-than-targeted $540 million.
India's IPO market saw a record $11 billion of fund-raising last year. Companies are in the process of raising a combined more than $2 billion in IPOs in March, but the recent weak response is being seen as a setback.
"Due to the weak market conditions and the line-up of defence IPOs, this offering has not done so well. But we were bullish on the stock and even at current prices would recommend a buy from a long-term perspective," said Tarang Bhanushali, assistant vice president, research at IIFL.
The government is yet to decide on public offers of Pawan Hans and Airport Authority of India (AAI) which have remained in the pipeline for long.
At 0630 GMT, shares in HAL were down 3.86 percent at 1,168.15 rupees after dropping to a low of 1,150 rupees in initial trades.
The Nifty has dropped around 8 percent from its record highs touched in late January.
($1 = 64.9400 rupees)
(Reporting by Swati Bhat; Editing by Subhranshu Sahu)