Don't buy PE-backed stocks blindly

Though they are likely to have higher governance standards, investors should do their own due-diligence

By the end of September 2017, 24 companies had hit the primary markets this year with their initial public offerings (IPOs), raising Rs 30,682 crore. Of these, 11 were by companies backed by private equity (PE) players who raised Rs 7,450 crore by offloading their stakes.

This is in sharp contrast to 2007, another blockbuster year for IPOs when 100 issues had raised Rs 34,179 crore from the market, but a meagre three of them were backed by PE players (who garnered Rs 240 crore), according to data from Prime Database, which tracks the primary markets. With nearly half