Sinohydro Group, China's largest dam builder, will kick off preparations next week for a 17.3 billion yuan (HK$21 billion) initial public offering that is expected to be the mainland's largest share sale this year. The construction company will launch a road show on Monday, two sources privy to the deal said. The China Securities Regulatory Commission (CSRC) in July approved Sinohydro's plan to sell 3.5 billion shares on the Shanghai Stock Exchange, but the firm had to wait for further approval from the body to raise funds. Sinohydro said in its preliminary prospectus that it would use proceeds from the offering for machine upgrades and new projects. The state-owned dam builder, which erected about two-thirds of the hydroelectric power plants across the nation, will consult with institutional investors before setting the price for each share, equal to 35 per cent of its enlarged capital. The benchmark Shanghai exchange lost nearly 12 per cent this year amid dwindling turnover as investors were hit by Beijing's monetary tightening and the widening European sovereign debt crisis. Analysts said the decision to approve Sinohydro's large-sized IPO amid the weak market showed that Beijing was determined to develop hydropower projects. Despite calls from investors to slow down on IPO approval to bolster the market, CSRC recently allowed two major deals by Sinohydro and Shaanxi Coal Industry which could soak up more than 30 billion yuan from the market. Shaanxi received approval on August 29 to sell two billion shares before the end of this month. A total of 164 IPOs raised a combined 149 billion yuan on the mainland in the first half of this year, 26.5 per cent less than in in the same period last year, according to financial data provider Wind Information. 'The IPOs are among the biggest enemies of mainland investors who have been forced to lick their wounds in the past few years,' said Haitong Securities analyst Zhang Qi. 'Liquidity will remain the primary concern, though some of the stocks are worth buying based on the current prices.' The regulator approved a record 349 IPOs last year, when the Shanghai index was the world's third worst-performing indicator.