BEIJING - The latest wave of new shares dropping below their initial public offering (IPO) prices on the A-share market may prompt the securities regulator to implement new rules to further reform the IPO pricing system, analysts said.

The IPO shares have met a cold reception from investors on the secondary market which has seen 15 of the total 21 new stocks falling below their offering prices in less than one month this year.

Share prices of companies such as the wind turbine producer, Sinovel Wind Group Co, have even dropped by more than 20 percent from the IPO price as of Monday's closing price.

Related readings:  China leads global IPO mart, may raise $60b  Sinovel Wind to raise up to $1.4b in Shanghai IPO  Hainan Rubber rounds off big year for China IPOs  Airline IPO prepares for HK take-off

Financial institutions, including the national pension fund and major mutual funds that invested in these IPOs, have seen a total book loss of more than 164 million yuan ($25 million), according to data from Wind Info.

The massive price fall of new shares may prompt the regulators to further adjust the country's IPO pricing mechanism by implementing new rules or even temporarily suspending approval for offerings, according to a report from the investment bank China International Capital Corporation Ltd (CICC).

But a press officer at the China Securities Regulatory Commission (CSRC) told China Daily that the speed of IPO approval remains normal and the regulator will continue to reform the pricing system step by step.

The overvalued offering prices and the weak market sentiment are the two major reasons behind the latest round of new shares falling below the IPO price, analysts said.

"It's been the third wave of new shares falling below the offering price since the regulator resumed IPO approval in 2009. And this means that the market is entering a period in the doldrums, at least in the short run," said Huang Xuejun, an analyst at Guosen Securities, in a report.

China has become the world's largest IPO market, with companies raising a total of $72 billion in 2010, according to data from Dealogic.

But the A-share market has become notorious for either sharp gains or sharp falls of new stocks on their trading debut, and the volatile trading has also led to large fluctuations in the overall market. The situation is even more serious on the startup board, ChiNext, that has an average price-to-earning ratio as high as 70.

Some analysts said that the root cause of the high IPO prices is that the supply of new shares, which is still administratively controlled by the regulator, cannot meet market demand, and this will eventually push up the offering prices.

The regulator has vowed to rein in the high valuations of IPOs by adopting new rules to reform the pricing mechanism and to make it more market-driven.

In October, the regulator allowed issuers and underwriters to recommend selected institutional investors, who have greater shareholding power, to participate in the price-inquiry process. The new rules also required issuers and underwriters to make detailed disclosure on prices quoted by potential investors in the pre-marketing of their share offers.

Shang Fulin, chairman of the CSRC, said during the regulator's annual work conference in January that market restraint on high IPO prices has started to take effect and that the regulator will continue to implement new measures this year.

There is also speculation that the regulator may soon give securities underwriters the right to find investors and allocate new shares to them, as a means of forcing the underwriters to shoulder more responsibility during share sales.