Huatai Securities, a mid-ranking Chinese brokerage, will launch what is expected to be the mainland's biggest initial public offering this year, hoping to raise more than Rmb20bn, ($2.9bn) in spite of downward pressure on IPO pricing from government regulators and increasingly wary investors.

The news comes as the Shanghai market continues to demonstrate a tepid response to new issues. Yesterday China Erzhong Heavy Industries fell below its issue price on its debut – the second time in a week and only the second time in more than five years – that a new issue has recorded such a poor performance.

News of more big IPOs in the pipeline could also further depress IPO performance, analysts said. China Merchants Bank said that it had won regulatory approval to raise up to Rmb22bn in a rights issue, according to a statement that was published in the official Shanghai Securities News.