Chinese authorities push Syngenta to withdraw $9b Shanghai IPO on market volatility

Chinese authorities have pushed Syngenta, a Swiss agrichemicals and seeds group, to withdraw its long-delayed $9 billion IPO application in Shanghai due to uncertainty about the impact a sizeable new offering would have on a volatile market, Reuters reported on Thursday.

The state-owned pesticide giant decided to pull its bid for the IPO last Friday, citing industry conditions and its development strategy.

Syngenta filed for a listing on the Shanghai Stock Exchange main board in May last year, aiming to raise 65 billion yuan.

Despite passing the exchange’s listing committee review, it did not receive approval from China’s securities regulator or top leaders at the State Council.

The decision to withdraw the IPO came after informal instructions from the China Securities Regulatory Commission (CSRC) in March.

This move highlights Beijing’s focus on stabilising the secondary market rather than launching new equity offerings.

The government’s request to cancel the IPO, despite the importance of Syngenta’s seeds for food security and self-reliance in grain production, reflects concerns about the potential impact of a large IPO on the fragile stock market.

The withdrawal underscores how Beijing is prioritising investor confidence in the secondary market over new equity offerings.

The decision was made to prevent further market instability, as large IPOs have been known to freeze significant amounts of money during subscriptions, affecting market liquidity.

China’s stock market turbulence at the beginning of the year followed years of underperformance compared to global stocks and deflation levels not seen since the 2008-09 financial crisis.