(Yicai) July 1 -- A record high number of firms withdrew their applications to go public or failed the listing review in the Chinese mainland last month, shrinking the pipeline by half from a year ago, after the authorities said in April that initial public offerings would be subject to stricter rules.

Some 106 companies terminated IPOs under review or at the registration stage or failed to pass muster in June, up from 46 the month before and just 25 in June last year, according to figures from data provider Wind Information. 

As a result, the mainland’s IPO pipeline halved to 467 companies last month, compared with 961 a year earlier, according to Wind’s data.

The IPO-hopefuls had planned to raise a combined CNY92.7 billion (USD12.8 billion), with three aiming to bag more than CNY3 billion (USD413 million) each.

A firm’s performance is a major consideration in the IPO review process, Tan Gefei, chief consultant at Shenzhen Daxiang IPO, told Yicai. At a time when the economy is weak, the uncertain earnings outlook for some companies is the main reason why they voluntarily pulled their IPOs, Tan added.

And those businesses with operational issues, non-compliant with the new requirements, or needing to supplement or adjust their prospectuses had no choice but to withdrawn their applications after the Shanghai and Shenzhen bourses issued new rules, Tan noted, adding that some are likely to try again in the future.

The two stock exchanges issued new rules on April 30, raising the requirements for companies that intend to go public, such as higher financial indicators and tougher checks on the authenticity of their financial data.

Editors: Tang Shihua, Martin Kadiev