Were IPOs overpriced? Were investment bankers and promoters too ‘greedy’? Lead manager to the two IPOs (Emaar MGF and Wockhardt Hospitals) that have been withdrawn in the last two days, S Ramesh, chief operating officer, Kotak Investment Bank spoke to Sandeep Singh about aggressive valuation in the primary market and what lies ahead.

Is the withdrawal of Emaar and Wockhardt a trend that's here to stay for now?

I don't see all IPOs not getting subscribed. Better companies, that are priced well, will do well.

Why have they not been able to get subscriptions?

Primary market to some extent is dependent on the secondary market. They are also dependent on the sentiments of investors. Both of which are currently volatile. To that extent these factors will impact the response to primary market. Secondly, primary markets have 'off seasons' and 'on seasons' and probably what we are witnessing today is more on the off season. We have seen in the past that issues that have come in such periods have not got the best response.

Why is there a bad response from retail investors?

Retail and HNI have clearly got impacted by the secondary market in the past couple of weeks and so they are significantly and substantially abstaining from investing in the primary market.

What about and qualified institutional buyers (QIB) who take more rational calls?

QIBs have not been staying out but they have started becoming choosey. They are clearly making a rational call on valuations. If they were taking more aggressive calls on valuations a month back, they definitely have become more choosey. And all the factors that they scrutinise be it valuations, size of issue and the liquidity, the greatest scrutiny is the market response.

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