Wockhardt and then Emaar have withdrawn their IPOs. Withdrawn is a joke. The public did not buy them, therefore the issue is gone back. What is the learning? In a rising market nobody, really nobody has any interest in saying that the issue is overpriced and the end customer should not subscribe. A greedy promoter supported by a greedier merchant banker, and then a bunch of bankers, brokers, etc. try to palm of all issues by using the most dangerous market terminology – “this time it is different”. What about the press? The less said the better. No press report spoke about NTPC vs. Reliance Power in pricing! NTPC has actually built the capacity. In case of Reliance we are hoping that the company will build it. Then commission it. Then earn money.

Now the press will be full of stories about Emaar being pricey, Wockhardt being far more expensive than Apollo Hospitals! You need this article BEFORE the issue hits the market. Let the media not ignore its role.

What about the Merchant bankers? Enam, Kotak, Goldman Sachs, Morgan Stanley, Merrill Lynch -surely none of them know valuation. Or they do a valuation which is different for their own hi end PMS clients and a different valuation for the masses. Choose your pick.

One merchant banker admitted that Maruti issue would never have come at Rs. 125 if the merchant banker knew it could sell for 1250! That is the truth. The market has acted as it should – prices rise and prices fall. You have to act sanely.

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