Prices for lithium - a key ingredient in rechargeable batteries used in electric cars - have halved in China this year due to oversupply, hurting near-term earnings prospects for lithium producers. The longer term outlook is, however, brighter as Beijing actively promotes EVs to combat air pollution.

Wall Street's worst drubbing in eight months overnight also exacerbated the slide for Ganfeng, China's top producer of lithium by production capacity and a supplier to carmakers like Tesla and BMW.

Ganfeng Chairman Li Liangbin put the blame for the share dive on stock market sell-offs around the world.

"As our company has a healthy and solid performance...we are confident that we can further improve our performance to reward our investors in Hong Kong," Li said at the opening bell ceremony.

Shares in Ganfeng stood at HK$13.08 by the end of the morning session, far below its offer price of HK$16.50 - a level that was the bottom of the marketed range in a sale that raised $421 million. The broader Hong Kong market was down 3.8 percent.

The listing gives Ganfeng, which also trades in Shenzhen, a market value of roughly $5 billion, not far off Tianqi which is the world's No. 2 by sales but has a market value of about $5.5 billion.

Tianqi is hoping to raise as much as $1 billion in its Hong Kong stock float, sources told Reuters in August.

It has grabbed more headlines than Ganfeng - building the world's biggest lithium processor in Western Australia and seeking to close a deal to buy a coveted 24 percent stake in Chile's SQM, the world's No. 2 producer of lithium.

Ganfeng plans to use the proceeds from its Hong Kong listing to acquire lithium resources and expand its production capacity of lithium metals, batteries, compounds and recycling.

The company made a net profit of 478.7 million yuan ($69 million) in the second quarter of this year, up 33 percent from the first quarter. Its 2017 revenue jumped 54 percent to 4.38 billion yuan.

Helen Lau, metals and mining research analyst at Argonaut Securities, said the stock's performance was more a reflection of the sell-off in global markets and did not reflect the fundamentals of the company.

The retail portion was also under-subscribed, which put pressure on the stock as retail investors are very sensitive to market sentiment.

"It's not fully subscribed, so coupled with yesterday's decline in the U.S. market that spilled over into Hong Kong market so the whole market sentiment becomes very bad," she said.

While Hong Kong is on track for a bumper year of listings, many such as online food delivery-to-ticketing services firm Meituan Dianping and hotpot chain Haidilao, have nevertheless fallen below their offer price, hit by weak markets.

Ganfeng could still raise as much as $448 million if a greenshoe option is exercised within one month of the start of trading.

(Reporting by Julia Fioretti and Julie Zhu; Additional reporting by Tom Daly in Beijing and Donny Kwok in Hong Kong; Editing by Edwina Gibbs)

By Julia Fioretti and Julie Zhu