By Yantoultra Ngui and Samuel Shen

SINGAPORE/SHANGHAI, July 27 (Reuters) - Shares of CXMT Corp surged nearly 470% at their Shanghai debut on Monday after Asia's biggest IPO this year, catapulting the chipmaker to the top of China's stock market by valuation despite a recent selloff in global tech stocks.

The stock began trading at 49.50 yuan compared to their sale price of 8.66 yuan per share. The rally in the first few minutes lifted CXMT's market capitalisation to 3.3 trillion yuan ($487.31 billion), sharply up from $85.5 billion during the IPO process.

The explosive debut makes CXMT the most valuable company listed in China, overtaking Industrial and Commercial Bank of China (ICBC), the market's previous heavyweight.

The debut will give investors a gauge of how much they are willing to pay for a marquee Chinese chip firm, as local markets navigate volatility following an AI-led selloff, and money rotates between high-growth technology names and safer sectors.

CXMT, formally ChangXin Memory Technologies, raised 57.92 billion yuan ($8.6 billion) and the proceeds could rise to 66.61 billion yuan if an over-allotment option is fully used.

At the IPO price, CXMT was valued at about 579 billion yuan ($85.5 billion) before the possible exercise of the over-allotment option, making it one of China's largest listed semiconductor companies.

Only 6.73% of CXMT's enlarged share capital will be freely tradable at listing, as most shares are locked up. The small initial float could magnify price swings and attract strong turnover.

HSBC Qianhai Securities said in a note last week that the offering could drain liquidity from the wider Chinese market before and on its debut, though past technology listings suggested a rebound could follow the next trading day.