Despite raising $7.4 billion in the world's largest initial public offering (IPO) in 2016, Postal Savings Bank of China did not fare so well on its first trading day at the Hong Kong Stock Exchange on Wednesday.

Stocks traded in a very tight range on its first day with shares closing at HK$4.77 ($0.62), up by just 0.21 percent from the opening price of HK$4.76 ($0.61). This came in at the lower end of a marketing price range of HK$4.68 ($0.60) to HK$5.18 ($0.67), BBC reported.

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It was a lackluster performance for the Postal Savings Bank of China considering that it raised a staggering $7.4 billion, the largest IPO since Alibaba's $25 billion IPO in 2014, CNN Money noted.

However, the flat debut comes as Postal Savings shares were not cheap at above one times its book value, Barron's Asia noted. Several investors criticized as the IPO was valued at a premium to other banks, which trade at a 10 percent to 30 percent discount to their book value, The Wall Street Journal pointed.

"The shares are being offered at 20 to 33 percent premium on a price-to-book basis and a 42 to 57 percent premium on price-earnings ratio to comps," Sumeet Singh, an analyst from Smartkarma, told South China Morning Post.

"Institutional investors don't want to pay for something that's grossly expensive compared to what you can get in the marketplace," Ken Wong, an Asian equity portfolio specialist from Eastspring Investments, told The Wall Street Journal.

Furthermore, six cornerstone investors secured more than three-fourths (77%) of the shares. But if the lockup period of six months end, it could create an overhang of potential selling, according to CNBC.

TagsPostal Savings Bank, Postal Savings Bank of China, IPO, trading, Hong Kong Stock Exchange, trading debut, banks, banking, stocks