Here is a verbatim transcript of Vallabh Bhanshali’s exclusive interview on CNBC-TV18. Also watch the accompanying video.

Q: Not a great listing, it’s just about hovering above its issue price. [In your address] in the morning, you were making a point about the need for a long-term view. Was it a plea to your institutional investors not to flip on day one?

A: We go and sell the IPO, it’s not really from a flip point of view but in the market making process, you have all kinds of people. We have seen the performance of companies like REC and some other companies where investors may have taken a short-term view and regretted. So I think we were addressing that experience that these are great companies, very difficult to duplicate and the business is all about the barrier that you have around it. These companies have huge barriers and therefore people should not get swayed by whatever may happen in the short to medium term.

Q: You were one of the lead managers to the NTPC issue as well and NHPC has been compared a lot to NTPC particularly with reference to the key metric of return on equity (RoE). Where does NHPC stand and do you think NHPC’s RoE over the next few years can be closer to its peer NTPC?

A: I think when you compared NTPC and NHPC it’s more in terms of their business, their depth of skills and the long pipeline of projects. That was the comparison that was being made. It cannot be compared on so many different parameters because their businesses are different in their implementation, methodology and so on. On this, we clearly see that NHPC is an underleveraged company and an underleveraged company will definitely dilute its return on equity (RoE) and therefore it is not comparable in that sense and as the company leverages its cash flow to build up projects, the RoE will look up.

Q: The stock is now holding a very slim premium against its issue price, I appreciate your point about not flipping on the first day but do you think the market is also trying to make a point about pricing of these IPOs and that not enough is being left on the table?

A: The judgement about price is not all contained on one day. It is not contained all on the subscription day because sometimes you see poor subscription and the companies make history and vice-versa. So I would say that we have to allow a stock to trade for some time and then take a judgement on that. I have no doubt that long-term investors in this company will get very good returns.

Q: Just to step away from the IPO market and to talk about the equity market, which has been quite volatile, how worried are you about what’s been happening in the Chinese equity space and whether there is any collateral damager our market might have to face?

A: The world is nervous as well as discreet at the same time. In the short term, it takes very nervous moves, [it is a] jumpy kind of attitude and therefore any adverse news anywhere around the world is received with jumpiness but we have seen that day after, the world does seem to wake up, take note, take stock and then move on its way. We have a coupled world and decoupled world kind of moving in tandem. That is what I would think we had the Chinese collapse sometime back, the markets were nervous, they came back, markets fell yesterday, markets have looked up today. People are looking at all kinds of data and not taking chances but taking a discreet action at the end of the day.

Q: We have seen these oversubscriptions to these IPOs but then listings are lukewarm and we don’t see enough appetite corresponding to the subscription post listing. Is it a disturbing trend for you that so much subscription is put in, perhaps to get and then to flip but not enough appetite or corresponding appetite comes in post the issue. In your eyes, is that a disturbing trend that so many even institutional investors are playing for a flip and do not have that medium-term perspective, forget long-term?

A: It’s an intriguing view and I would try and explain it with two arguments. One is that the world is very jumpy, it doesn’t have a firm trend that lasts for any significant period of time and therefore people change view about markets, about stocks etc.