South Korea's most closely watched data center IPO falters, plunging 28% on its debut.

BlockBeats news, October 20, Tuesday, South Korean artificial intelligence (AI) services company Elice Group's shares plunged 28% on its trading debut. Currently, market investment sentiment toward the sector has sharply cooled, causing several companies' listing plans to be stalled.

Elice raised 201.1 billion won (approximately $150 million) in its initial public offering (IPO). The company provides AI cloud services and AI-based education and business software, and plans to use most of the IPO proceeds to launch portable modular data centers and related infrastructure. Against the backdrop of high inflation keeping borrowing costs elevated, investors are increasingly questioning whether the massive amounts of capital invested in the AI sector can deliver returns in the short term.

Kim Hak-joon, an analyst at Seoul-based Kiwoom Securities, said: "The market is worried that such companies may not be able to secure follow-on financing from investors." Elice's shares were last quoted at 65,300 won, compared with its IPO offer price of 90,500 won. According to relevant filings, the company received institutional subscription orders during the IPO amounting to 388.84 times the number of shares available for subscription.