The flagship carrier's shares fell to 590 rupiah (6.6 US cents) from the initial public offering (IPO) price of 750 rupiah, before bouncing back to 640 rupiah -- 14.67 percent off -- by the break.

The airline posted a net profit of more than $100 million in 2009 and was named the world's most improved carrier last year by London-based research company Skytrax.

However analysts said the offer price was too expensive.

"The market is also volatile, taking into account (Indonesia's)rising inflation rate among other things," Valbury Securities analyst Robin Setiawan.

"For a long-term investment, or at least medium-term, the prospect for Garuda is still solid."

State enterprises ministry official Pandu Djajanto told reporters 3.01 billion, or 48 percent of Garuda's 6.33 billion shares, were absorbed by underwriters and selling agents.

Garuda CEO Emirsyah Satar said the $540 million raised from the IPO would help the airline expand and modernise its fleet.

He described the listing as a historic event and a big challenge for the company.

"By becoming a public company, this prompts us to become more transparent and hard-working in order to achieve better performance," Satar said in a statement.

The European Union banned all Indonesian airlines from its airspace in 2007 after a series of crashes and incidents exposed poor safety standards across the country's aviation industry, including Garuda.

But European regulators lifted the ban for Garuda in 2009 and the airline completed its first flight back to the continent in June, landing in Amsterdam.