IPO Pricing Control,Market Feedback And Private Placement

The report of the 19th National Congress of the Communist Party of China clearly pointed out that it is necessary to deepen the reform of the financial system,enhance the ability of financial services to serve the real economy,increase the proportion of direct financing,and promote the healthy development of the multilevel capital market.IPO issuance is an important part of the capital market’s healthy development.The refinancing market is an important node for the financial system to support the development of enterprises and add impetus to the development of the real economy.The good operation of the refinancing market can allow listed companies to obtain funds and grow healthily.Since 2014,there has been an invisible limit on the upper limit of price-earnings ratio in the pricing of IPOs in my country,which will naturally reduce the funds raised by companies in the initial IPO market and have an impact on the sources of funds for listed companies.On the other hand,the refinancing market,especially the private placement market,is extremely prosperous.In 2016,the private placement financing amount reached a high of about1.6 trillion yuan.There are many studies on the two important equity financing platforms,the IPO market and the SEO market,respectively,while relatively few studies link the two.In the context of the institutional background that IPO pricing is strictly restricted,this paper studies the specific and practical impact on the refinancing behavior of companies due to the restricted issuance pricing,which reflects the policy constraints.How to act on the refinancing market through the behavior of micro-enterprises.On the other hand,this paper studies whether the feedback of the secondary market has an impact on the initial issuer of the enterprise when the value signal of the primary market loses its function,that is,whether the market reaction of the new shares in the short term after the issuance will play a role in the value signal.This paper selects all the companies that conducted IPOs in A-shares from June 2009 to December 2018 as research samples,and observes the behavior of these companies in the private placementmarket within three years of listing.Through empirical research,it is found that:(1)companies affected by IPO pricing restrictions tend to circumvent policy restrictions,obtain income from the refinancing market to make up for the indirect costs they bear in the IPO market,and reduce their IPO restrictions due to financing restrictions.The impact caused is embodied in the higher probability of entering the private placement market for refinancing,the faster private placement after IPO,the larger size of the private placement than the IPO,and the relatively higher price of the private placement.(2)It is found that the short-term market performance after the listing of new shares can have an impact on the behavior of companies in the private placement market.The specific manifestation is that companies with better market feedback after the listing of new shares have a higher probability of entering the private placement market for refinancing and will be more likely to refinance.A faster return to the refinancing market,a larger financing scale,and a relatively higher issue price.This shows that the initial issuer of the company will judge its own value with reference to the feedback from the secondary market,and change its subsequent behavior in the fixed increase market based on these feedbacks.The results of this paper can provide reference for further improving the system and doing a good job in supervision.