Zhejiang Shibao Co Ltd , a Chinese maker of car steering systems, launched its Shenzhen share offering on Thursday after slashing its initial fundraising plan by more than 90 percent due to pressure from the securities regulator.

Shibao was forced to downsize the share sale plan after the China Securities Regulatory Commission (CSRC) pressured the company to sell its mainland-traded shares at a level similar to its Hong Kong-listed shares, IFR, a Thomson Reuters publication, reported last week, citing sources.

According to Shibao"s prospectus posted on the Shenzhen stock exchange"s website late on Wednesday, it plans to raise 38.7 million yuan ($6.2 million) by selling 15 million shares at 2.58 yuan each. That is less than one tenth of its original fundraising target of 510 million yuan.
The prospectus did not cite a reason for the downsizing and officials at both Shibao and China Merchants Securities, the underwriter, declined to comment. A CSRC official also declined to comment.

The CSRC has come under criticism from investors who were burned after buying into share offerings that were priced at lofty valuations and subsequently fell sharply after their market debuts. Analysts speculate the regulator"s recent intervention could be a move to keep prices at moderate valuations.

Under the initial plan, announced in April, Shibao"s IPO was expected to be priced around 7 yuan, three times more expensive than its Hong Kong-traded shares.

"The CSRC wants the issuer to leave something on the table and, hence, allow investors to make some money, given the sluggish market conditions," a banker on the deal told IFR.

Last month, China Molybdenum Co Ltd , another Hong Kong-listed firm, was also urged by the regulator to downsize its mainland IPO by 80 percent.

China Molybdenum"s shares nearly tripled on its Shanghai debut earlier this month as investors deemed the stock to be undervalued. The shares have since hovered around 9 yuan, at levels three times the value of its Hong Kong-listed shares.