Shares in India's Jaypee Infratech fell as much as 12 percent on Friday, making them the second listing in as many days to fall on debut in the wake of the euro zone debt woes that have rocked world markets.
The tepid response could dent investor support for new share offerings in Asia's third-largest economy that is forecast to expand more than 8 percent this year.
On Thursday, state utility Satluj Jal Vidyut Nigam had ended its market debut below offer price.
Private-sector road builder Jaypee, a unit of construction firm Jaiprakash Associates, had raised $500 million in an initial public offering that was 1.2 times covered and priced at the lower end of the 102-117 rupees per share range.
At 10:10 a.m. (0440 GMT), the shares were trading at 92.95 rupees, down 9 percent, after having fallen as low as 90 rupees in the opening deals. The main Mumbai market was down 1.2 percent.
The stock was the second most actively traded on the Mumbai market, notching a volume of about 8 million shares.
Jaypee is developing a 165-kilometre, six-lane Yamuna Expressway in the northern state of Uttar Pradesh at a cost of $2 billion, connecting Noida, near Delhi, with the city of Agra, where the Taj Mahal is located.
The company plans to develop real estate of about 25 million square metres along the expressway.
Morgan Stanley India, Bank of America-Merrill Lynch, Axis Bank, Enam Securities, IDFC Capital, ICICI Securities, JM Financial, Kotak Mahindra Capital and SBI Capital Markets were managers to the issue.
Indian companies have raised about $11 billion through share sales in the domestic market so far this year, compared with $16 billion in 2009, according to Thomson Reuters data.
Analysts expect the proceeds to rise to as much as $40 billion in 2010.