German industrial conglomerate Evonik may put its planned second-quarter listing on ice if valuations in the chemical sector remain at current levels, two sources close to the transaction said.

"Evonik's owners want to see an equity value of at least €15 billion ($19.7 billion). Right now it looks like they would get only 13.5 to 14 billion", one of the people said.

"At this valuation, they won't float Evonik."

However, if after strong first-quarter results the market is gauged as robust enough to accept a higher price, Evonik's owners are likely to publish an intention to float on May 25. The initial public offering or IPO could then come a month later.

The RAG Foundation, which owns a 75% stake, and 25%-owner CVC hope the IPO will give Evonik an enterprise value of 6.5 to 7.5 times earnings before interest, taxes, depreciation and amortization, the sources said.

RAG, CVC and Evonik declined to comment.

Enterprise value is the sum of the equity value and net debt, which in the case of Evonik stood at €843 million, at the end of 2011.

A valuation of about 7 would be in line with the multiples of peers like U.S.-based DuPont or Germany's BASF . According to StarMine, DuPont has a multiple of 7.6 times expected operating earnings, while BASF has one of 5.4.

A person close to the Evonik IPO preparations said that the BASF figure should be adjusted for tax effects related to its oil and gas unit, which would yield a multiple of 6-6.5.

Evonik in 2011 posted operating earnings of €2.76 billion and has said it expects 2012 operating earnings to be "slightly below" previous year's level.

IPO discount

Investors expect to see an "IPO discount" of 10% or more for buying shares of a company that has no stock market track record.

RAG Foundation's executive committee, the so-called board of trustees, plans to decide on May 21 whether to go ahead with the listing, the sources said.

The foundation had begun IPO preparations last year but put the plans on ice in September in view of the weak financial markets at that time. Companies like Advent's H.C. Starck and Siemens' Osram also postponed their listings due to jittery markets.

Meanwhile, demand has returned to a certain extent and investors have been rushing to buy shares of Switzerland's DKSH , which helps companies market and distribute goods in Asia, and of Dutch cable company Ziggo.

Josef Ritter, who is responsible for Deutsche Bank's equity capital markets business in Germany said that capital markets were currently not as strong as in the first quarter, due to Spanish debt issues and lower-than-expected U.S. growth figures.

"The first quarter was probably too good to soon. But that does not mean that the market environment will not be good enough for IPOs in the second quarter," Ritter said.