Investors should verify the track record of the company and its promoters, compliance status with various regulations and whether any of its officers had been found guilty of economic offence, the Ministry of Corporate Affairs said.

Similar alerts were earlier issued by the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), who had warned investors not to be swayed by fraudulent tips and stock recommendations promising high returns.

Issuing the public interest advertisement on Monday, the ministry said the information needed to make an informed decision for IPO investments is available with itself and investors could access them on its own as well as some other investor-focused government websites.

The ministry said information like master data of companies, details on director and documents like annual returns and balance sheets as well as a list of vanishing companies are available on its website.

It said that in order to get an overview of the company, investors should compare the financial results and performance of the company over the last 3-5 years.

"The decision should not be driven by sectoral boom alone," it said, adding that a company's performance does not necessarily relate to the sector or entire economy trend.

The ministry also suggested to spread the investment across different IPOs and should invest only after being convinced about the business model of the company.

"Do not place all your eggs in one basket. It is always wise to spread your investment across different companies/ IPOs/instruments," the ministry said.

"Read the complete prospectus carefully even if it is time consuming, it will give an idea about risks and potential growth prospects," it noted.

The BSE and NSE last week also asked the investors to remain alert and do a thorough evaluation before investing in any security. They asked the investors not to "get misled by recommendations in newspapers, electronic media, websites."

"Do not get swayed by promises of high returns. Verify the tall claims made in such advertisements," the alert said.

"Be careful about stocks that show a sudden spurt in price of trading activity without a change in the fundamentals of the company," the NSE said while asking the investors to check its website for authentic price-volume data, financial and shareholding patterns of companies.

Investors are also advised to tread carefully before investing in equities and keep away from rumours and advertisements promising large returns, the alert said.