Realty prices are again close to the peaks seen in 2007. Where do they go from here?

I don't see prices going higher in commercial, shopping or information technology (IT) or retail, but I am a little concerned about prices in the residential sector because they are shooting up very fast and we have to look at the affordability aspect in India. If they rise any further from here, I don't think the demand can sustain because people do not have the money for it. That's the point I have been harping on the developers don't keep increasing the price just because there is a ray of hope (in terms of sales). Yes, the worst is over, there is optimism and there could be boom but they need to keep a check on themselves.

You have had issues on teaser rates in home loans. How big is the concern in the long run?

Teaser rates are definitely a concern but they are a marketing tool and one has to work out the profitability of a product and one has to be careful and cautious about the loan amount given.

A buyer's salary should be capable of servicing the loan amount after the increase in interest rates and not just for the first two years.

Teaser rates are around 8-8.5% now. Where should they be in, say, two years for things to remain stable?

I would say around 10%. You have to take that in account when disbursing a loan today. Also, anything more than 10% would be a concern.

What do you think about the rush of realty IPOs coming?

The biggest concern for me is valuation. In 2007, there were a flurry of issues as realty was then the hottest investment sector, but today most of the recent IPOs are under water. The pricing of IPOs needs to evolve, become a mature process. If there's nothing left on the table for investors, why should they part with their money?

Timing is also important there are about 12 realty IPOs in the pipeline and bunching them up isn't good for the market. If one issue fails, it'll set a bad precedent.

Digressing from realty, what was the biggest challenge you faced while sorting out the Satyam scam?

All I can say is that good luck helped me. That's all.