The trading floor of the Shanghai Stock Exchange in Shanghai Photo: CFP

The IPO of Postal Savings Bank of China (PSBC), which has roughly 40,000 outlets nationwide and more than 600 million individual customers, met with a muted response when it began trading on Tuesday, underpinned by rarely used price-stabilization measures taken by the nation's fifth-largest lender by assets.

Shares of PSBC opened at 5.6 yuan ($0.8) in Shanghai on Tuesday, versus an IPO price of 5.5 yuan. The shares closed up 2 percent. 

PSBC was the top gainer in the banking sector, which shed 0.63 percent on Tuesday. The key Shanghai Composite Index finished up 0.1 percent at 2,917.32 points. 

A greenshoe option, or overallotment option, was attached to PSBC's IPO, making the bank the fourth ever in the A-share market to use that mechanism, Wu Jinduo, head of fixed income at the research institute of Great Wall Securities, told the Global Times on Tuesday. 

The previous three were Industrial and Commercial Bank of China, Agricultural Bank of China, and China Everbright Bank. PSBC's IPO would be the largest in nearly a decade in the A-share market, if the option is exercised in full.

The greenshoe mechanism allows for the offering size to be increased by a maximum of 15 percent during the first 30 days of trading. If the bank's shares fall below its IPO price, the option allocated for underwriters would be exercised, funneling more money into the market to stabilize the price and thereby protecting investors, Wu said. 

Additionally, PSBC's parent China Post Group, the bank itself and some executives would increase their stakes in the bank, if its shares in Shanghai fall below the latest audited net asset value per share for 20 consecutive trading days during the first three years of trading. 

Also, the bank said in a filing to the Shanghai Stock Exchange over the weekend that its parent company planned to invest at least 2.5 billion yuan to increase its holding in the banking subsidiary during the 12 months starting from the IPO day.

The overallotment option and plans to increase stakes ostensibly helped in offering stability and liquidity to the new issue. But they also signal that there's pressure on bank listings, according to Wu.

PSBC's first-day performance pales in comparison with easy bets on A-share market debuts, which normally jump 30-40 percent on their first day of trade. 

The small gain on the first day was also reminiscent of the IPO of Zheshang Bank in late November. Shares of the Hangzhou-based lender closed up a mere 0.6 percent on its debut in Shanghai before falling below the offer price on the following day.

PSBC's Shanghai listing followed its Hong Kong IPO in September 2016. Its H shares closed unchanged at HK$5.21 ($0.67) on Tuesday.