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In January alone, strategic investors and PE funds struck 116 deals worth $5 billion or at the rate of one every six hours. But the overvalued IPOs, in the recent past, could impact foreign investments fairly soon. Private equity players think valuations are skyrocketing, and are waiting for this irrationality to come down.

According to industry experts, this irrational exuberance is overshadowing reality. Giving time-honoured traditions of thriftiness a back seat, Indians are increasing their appetite for risk. Ownership of stock has increased among Indians. It is an important element of wealth management since understanding of equity has gone up. It is a new style statement.

 The craving for real estate ownership too is showing no signs of abatement. For instance, the going rate for apartments in NCPA building in Mumbai’s Nariman Point is Rs 75,000 per sq ft, compared to Rs 30,000 two years back. The realty boom is largely driven by youth who have a cosmopolitan outlook and money to spend. Others invest in commercial property because they think there is no hope of real estate price rationalisation in the near future.

Talking about hyper valuations, cricket’s latest circus, IPL is in a league of its own. Although its promoter BCCI and other direct stake holders are talking up the prospects of the greed-is-good league, the chorus of naysayers is growing faster than rookie bowler Ishant Sharma’s “brand value”. The valuation of everything about IPL is far from rational. The reality of IPL will dawn later. What’s driving these valuations skyward are vanity and ego and not sound business potential.

As its moniker suggests, Messers Modi & Co at BCCI seem to be heavily influenced by the English Premier League. But, financially, they’d be hoping to copy American sports models such as the National Basketball Association (NBA), Major League Baseball (MLB) and National Football League (NFL). All of them are sports leagues that have very little global appeal but can thrive just on the back of huge domestic following. The MLB for instance, whose audience is limited to the US, Japan and few Latin American countries is a multi-billion dollar business and can afford player wages of up to $30 million (Alex Rodriguez of the New York Yankees is the lucky one there). But EPL or other popular European football leagues are proven money spinners with the kind of global appeal the IPL cannot even dream of.

Moreover, dubs such as Liverpool, Manchester United or Real Madrid have a strong, emotional connect with the local communities built over the last 100 years. But for a newborn, one-market sports league both the franchise and indeed the player valuations seem iffy if not outrageous. India Cements’ Narayanaswami Srinivasan is no Roman Abramovich, but he doesn’t mind coughing up a staggering $31200 for an hour of match play for Dhoni, while the most expensive EPL footballer, Chelsea’s Michael Ballack with a weekly wage $260,000 gets roughly $18000 an hour on the pitch. However, I thing, IPL is nothing but one big joke. Except BCCI and the players, no one else is going’ to benefit from this model. Let this game start and people will realise they have burnt their fingers.

If someone’s interested, it is Warren Buffett who said, it’s only when the tide goes out, that you discover who has been swimming naked. We hope skinny dipping doesn’t become India’s national sport.