Regulator tightens IPO oversight, with only 24 companies going public so far in 2024
A total of 67 companies in China ended their initial public offerings as of Monday this year, up from the 43 in the same period last year as China eyes stricter oversight over IPOs.
During the period, 24 companies completed IPOs and went public, lower than the 56 companies for the same period last year, indicating a significant slowdown in the issuance pace. The total funds raised through IPOs amounted to 20.35 billion yuan ($2.82 billion), compared to 47.459 billion yuan during the same period last year.
The slowed IPO pace come as the regulators have tightened market oversight amid efforts to lift quality of listed companies and protect investors’ rights, using a combination of both ‘teeth and thorns.’
The China Securities Regulatory Commission (CSRC), the country's top securities regulator, issued four policy documents on Friday, putting its focus on stronger supervision on IPOs.
The CSRC will strengthen the IPO issuance supervision and hold all relevant parties accountable. This includes ensuring the quality of IPO applications, prohibiting blind listings for fundraising purposes, and cracking down on financial fraud and false disclosures, said Li Chao, vice chairman of the CSRC.
There will be increased random inspections and stricter scrutiny of non-profitable enterprises seeking IPOs, the official said.
Experts said that measures will improve the quality of IPOs from the scratch, and drive positive changes in the IPO market ecosystem.
It is important to ensure the quality of companies planning to go public and guide these companies to have the right perspective. In the future, seeking a listing for the sole purpose of raising funds and placing excessive emphasis on fundraising will be strongly restricted, Tian Xuan, vice president of the Tsinghua University PBC School of Finance, told the Global Times.
By tightening oversight over IPOs and improving the quality of listed companies from the scratch, the CSRC has taken a significant step toward enhancing investor value across the A-share market and raising the overall quality of listed companies, Yang Delong, chief economist at the Shenzhen-based First Seafront Fund Management Co, told the Global times on Wednesday.
These new measures are targeted solutions to address the existing problems in IPOs, and they will effectively protect the interests of small and medium-sized investors while promoting the development of a healthy capital market, Yang added.