China has more than tripled its Initial Public Offering (IPO) volume and the capital raised in its A-share market this year, with the country leading the world in terms of the number of companies going public.

A total of 120 enterprises in Shanghai and 126 in Shenzhen have gone public in the first half of 2017, an increase of 303% on the same period last year, according to Ernst & Young, in its Global IPO Market Study Report, which was released on Monday.

Fundraising has totaled 125.6 billion yuan (US$ billion), a rise of 336% on the first half of 2016.

Given that the China Securities Regulatory Commission plans to green light a total of 585 IPOs in 2017, there is no indication of a slowdown coming in the second half of the year.

“Companies have been jammed in queuing up to go public for the past four or five years, which has ossified the market. And the previous long wait has helped to weed out companies without sustainable revenue models”

Ringo Choi, IPO leader at EY Asia-Pacific, believes the acceleration in the number of IPOs is a reflection of companies – including smaller and medium-sized enterprises – trying to free up capital in view of the tightened liquidity that has resulted from financial deleveraging.

“Companies have been jammed in queuing up to go public for the past four or five years, which has ossified the market,” Choi said. “And the previous long wait has helped to weed out companies without sustainable revenue models.” The current acceleration is therefore to be expected, he added.

The highest number of IPOs – 79 companies – were from the industrial sector, which also raised the largest amount of funds: a total of 33.95 billion yuan. This reflects the government’s emphasis on transforming and upgrading China’s manufacturing industry.

Companies in the technology, media and telecommunications sectors – and those in the retail and consumer products and services sectors – were all well-represented on the IPO list. There have been no large bank IPOs so far this year.