Steelmaker CTL Australia Group Ltd. has withdrawn its application to list on the ASX because it is yet to prove that it is on a solid path to profitability.

CTL, the Australian holding company for a group of companies operating in the steel components industry in China, was originally aiming to make its debut on the Australian bourse in early March.

The company was aiming to raise up to A$10.0 million to expand its automotive component manufacturing capacity, which accounts for about 10% of the group's revenue. In July, CTL was still shoring up investor support for its IPO.

S&P Global Market Intelligence understands that the ASX has tightened up its acceptance criteria and felt that CTL needed to demonstrate that its turnaround plan was working.

An ASX spokesman confirmed that CTL had withdrawn its application following talks with the bourse, adding that the listing application was not "formally considered."

"ASX doesn't comment on specific listing matters. However, we have an absolute discretion under the rules to grant or refuse admission," the spokesman told S&P.

"In exercising this discretion we take into consideration factors such as an entity's financial history and ongoing viability, board governance arrangements, and the imperative of maintaining the reputation of the ASX market."

CTL was formerly a state-owned company that was losing money and placed into administration in 2013. In 2014, the now existing shareholders through their entity, Ningbo Zhongtian Yongcheng Trade Co., Ltd. took control of CTL and sister company Ningbo Nantian Metals Co., Ltd., recapitalized the businesses and began expanding operations.

The current owners have invested substantially in a bid to return CTL to profitability, but in order to list on the ASX more time is needed to demonstrate that the turnaround is sustainable.

S&P understands that the company is still deliberating its next move and may consider first listing on Australia's National Stock Exchange, which has less stringent acceptance criteria and specifically caters to small to medium-sized companies.