(Yicai) Dec. 4 -- More than 400 applications for initial public offerings in the Chinese mainland have been terminated so far this year after the securities regulator beefed up oversight of those businesses seeking to go public.

Of the 428 IPO applications discontinued in 2024 as of yesterday, a 75 percent increase on a year earlier, 150 were bound for the Shanghai market, 202 for the Shenzhen market, and the remaining 76 were for the Beijing bourse.

The surge comes down mainly to tighter regulation, stepped up policy guidance and regulatory efforts, and investors adjusting how they price assets, leading to applicants re-assessing the market, Tian Lihui, director of Nankai University's Institute of Finance and Development, told Yicai.

China’s IPO market is likely to gradually normalize next year, but heightened scrutiny will probably persist for some time, Tian pointed out.

One investor told Yicai that some companies pulled their IPO filings despite meeting performance benchmarks because their growth prospects were not up to scratch.

Two listing reviews were halted in the first two days of this month. Heating cables producer Wuhu Jiahong New Materials pulled its filing more than a year after its initial approval, while that of gate driver and power module maker Firstack Technology expired after no progress was made following the regulator's inquiries.

Hangzhou-based Firstack plans to re-apply, a person close to the company told Yicai.

Tian noted that businesses that fail to complete the listing process typically explore other options such as restructuring, alternative financing options, mergers and acquisitions, or even relaunch their IPOs.

Recent M&A targets have been companies whose IPO applications have been terminated, according to the head dealmaker at an investment bank, who added that these firms often make compliant acquisition targets, thereby enabling deals faster.

Editors: Shi Yi, Martin Kadiev