Global Market: South Korea's Elice shares plunge 28% in market debut as data centre stocks shunned

Elice, which raised 201.1 billion won ($150 million) in its IPO, provides AI cloud services as well as AI-based education and business software and plans to spend most of its IPO proceeds on launching portable modular data centres and related infrastructure.

Investors are increasingly questioning whether massive AI spending can pay off anytime soon as elevated inflation keeps borrowing costs high.

"There's worry that these kinds of companies may not be able to get additional funding from investors," said Kim Hak-joon, an analyst at Seoul-based Kiwoom Securities.

"Everyone is not sure how much demand for AI there will be and it is hard to estimate current demand."

This month, data centre firms that have shelved their IPO plans include Australia's Firmus, which is backed by Nvidia , Blackstone-backed AirTrunk, which postponed a Singapore REIT IPO, as well as SB Energy, a unit of Japanese tech investment conglomerate SoftBank, which had filed paperwork for a US IPO.

Elice's shares were last trading at 65,300 won compared with its IPO pricing of 90,500 won. The IPO drew institutional orders worth 388.84 times the shares available in the offering, according to a filing.

The company has said revenue for the first half of the year tripled to 34 billion won and that it swung to an operating profit of 10 billion won compared with a 3.5 billion won loss for the same period a year earlier.

(Reporting by Heejin Kim; Additional reporting by Hyunjoo Jin and Yantoultra Ngui; Editing by Edwina Gibbs)