Shares of Rams Home Loans dropped nearly 20 per cent on Tuesday after the provider of residential home loans in Australia warned that volatile global credit markets would likely have a material impact on its profits.

The shares, which initially fell as much as 32 per cent, were punished as the warning came only weeks after the group floated on the Australian stock market at A$2.50 in an issue lead managed by UBS. The stock ended on Tuesday at A$1.41, down 19.4 per cent, making Rams the country’s worst-performing initial public offering this year.