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April 14, 2017

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Faster IPO nod may aid PE firms

QUICKER approval for domestic initial public offerings may offer private equity firms and related funds a faster exit, industry officials said during an investment forum yesterday.

More than 500 firms are expected to launch IPOs in 2017, up from 300 last year. Under the current IPO system, new shares are subject to approval from the regulator. But China has fastened the approval process and aimed to transform the approval-based system to a more market-oriented one.

China’s capital market will handle 500 IPOs annually in the next decade, according to Chinaventure, an investment consulting firm.

The domestic stock market, boasting high valuation compared with the US and Hong Kong markets, attracts PE firms and yuan funds. They can easily “exit” and get investment returns via domestic IPOs and mergers and acquisitions in the domestic markets.




 

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