Non-PE backed IPOs Vs PE-Backed IPOs
Generally, private equity firms (PE) know as investment management companies. These PEs guidance investors to make investments in PE startup companies and also provides financial resources. A report said that the PE-backed IPOs failed to beat Non-PE backed IPOs.
In the past three years, 39 companies launched their public offerings. These issues gained up to 15 percent of listing returns in Fiscal 2019. At the same time, 37 non-PE backed companies offered up to 17.7 percent of listing returns.
A source said that 26 non-PE backed companies average listing returns stood at 23.3 percent excluding 11 public sector undertakings. On the other hand, 27 PE-supported firms listed over the premium to their industry diverse.
The investment experts stated that sent percent of private equity resource issues listed strongly even in the tough market conditions and demanding in valuations. PE supported IPOs listing depends on the assessments, market opinion, and fundamentals of the company. Business norms, brand value, gaining path records are considered under the factors of particular company fundamentals.
Even broader market sentiment has dropped off a little. Recently launched IPOs priced reasonably and also got a huge response from the investors. In April 2019, Metropolis Healthcare launched its IPO listed on BSE & NSE. It was backed by the Carlyle group. It had listed at 9 percent premium over the issue price. But, Spandana Sphoorty listed at a 3.6% discount over the offer price. Moreover, PSU and Government stocks listed at a premium.
Maximum of private equity firms under financial, technology, media & telecom, healthcare IPOs withdraws in the past three years.