Chinese-owned seed giant Syngenta Group on Nov. 9 postponed its Shanghai initial public offering (IPO) until the end of 2024, citing market volatility. Earlier on Nov. 9, Syngenta also reported a third-quarter EBITDA of $300 million, down 68% from a year ago. EBITDA was significantly impacted by a softer market and a one-time seed inventory correction in Brazil.
The company will “remain flexible in our approach and explore alternative methods to expanding our shareholder base,” a spokesperson said.
The IPO delay doesn’t bode well for new listings in Asia for the remainder of the year, according to a Bloomberg report.
The announcement highlights a general malaise in first-time share sales in Asia and follows China’s securities regulator’s decision in late August to slow the pace of IPOs amid an economic downturn that has been weighing on investors. The regulator said it aimed at maintaining market stability, adding that some companies have withdrawn IPOs recently due to declining performance and a lack of stable ownership. The CSI 300 Index is down 6.7% so far this year.
If interest rate hikes stop, there may be “revived interest” for large offerings by Asian companies, according to Ke Yan, the Head of Research at DZT Research in Singapore.
China has been the main source of big-ticket listings in Asia this year, with eight of the top 10 taking place in the country. IPOs in mainland China have raised $53 billion in 2023, down 37.6% from the same period in 2022, according to data compiled by Bloomberg. That’s in line with the nearly 40% year-over-year drop in volume in Asia as a whole.
Syngenta’s $9 billion IPO would have been the largest listing of 2023, beating Hua Hong Semiconductor Ltd.’s July offering in Shanghai, which raised nearly $3 billion.
Sumeet Singh, Head of Equity Research, IPOs and Placements at Aequitas Research in Singapore, said he doesn’t think Syngenta can get such a large deal away at the moment. “I wouldn’t say that it would never happen,” he added.
Asia is not alone, as IPO markets have disappointed elsewhere. Europe’s brief IPO revival is fading as a flurry of deals including CVC Capital Partners, one of the region’s biggest private equity firms, have been delayed amid valuation discrepancies.