Why investors would do well to avoid Corrtech and Joyalukkas IPOs

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Editor's note: When established businesses decide to do an IPO, the most important change they want to showcase is that they are open to a public scrutiny of their performance. That is usually a far more important consideration than, say, wanting the public to be a part of their growth or using the listed tag for better comfort with lenders. This was perhaps the most important facet even in the recent public issue of shares of Life Insurance Corp. of India, whose financials were shrouded in mystery for over six decades. So, when I want to gauge a promoter’s purpose behind an IPO, I head to the page of the prospectus that lists the directors. My reckoning is that if a company has decided to open its books to regulators and the public, there should be some evidence that the company’s founders are willing to be asked questions by representatives of the public at large—the independent directors. Let’s for a moment forget that independent directors haven’t exactly covered themselves in glory over the years and asked the right questions. Just the presence …