Finance Minister Mathias Cormann said the privatisation, which was the biggest Australian float since the $14 billion partial listing of Telstra in 1997 and the third biggest global listing this year, was a "win, win" for taxpayers and investors.

However, not everyone agreed with his sentiment after the late fall raised questions about how governments should price future privatisations.

After rallying as high as $2.23, Medibank shares closed their first day of trading 1c below their issue price of $2.15. That meant 440,000 retail investors who paid $2 a share enjoyed a 7 per cent or 14¢ rise in the value of their shares.

BBY executive chairman Glenn Rosewall said it was critical that sales of government assets were valued in a way that stokes interest. "There was excess demand for Medibank Private; they priced it a bit higher than some people were expecting," he said.

"You need to make sure that you price these things so that you attract people to your next transaction and the [federal] government wants to sell some assets."

Institutional investors made up 40 per cent of the new register and bought in at the offer price of $2.15 meaning the value of their shareholdings fell 1¢ or half a per cent.

Colonial First State Global Asset Management head of Australian equities Marcus Fanning said the government "got a pretty fair price".

Mr Fanning said that unlike the October privatisation of the United Kingdom's Royal Mail where shares soared on debut, "[Medibank] was never going to be a big one-day pop situation and that is reflected in the pricing."

Fund managers and analysts have said the lofty valuation will put extra pressure on Mr Savvides to hit expectations, and more, to justify the high price.

Mr Savvides said he was focused on meeting Medibank's prospectus forecasts. In 2014-15 Medibank has said it will grow revenue by 4 per cent to $6.6 billion. Pro forma operating profit, which removes the costs of the IPO and other one-off items, is expected to rise 10 per cent to $282 million. "In their own right they're not numbers that will be a walk in the park," he said. "We'll have to work hard to deliver them and that's our intent."

The 58-year-old said he felt an "awesome responsibility" to lead Medibank to the third largest IPO in the world in 2014 behind Chinese online retailer Alibaba's US$25.0bn IPO and National Commercial Bank's US$6.0bn float.

"Isn't it an amazing statistic? It caught me by surprise," he said.

"I read about that just this morning on the way to the launch. We need to honour [investors'] commitment and trust in us."

Mr Savvides said the $19 billion health insurance market was an "exciting" sector, notwithstanding some challenges. Premiums have risen an average of 8.4 per cent per annum over the past decade. In response customers have begun switching providers more as they look for more affordable deals. Medibank has struggled to maintain and grow the market share of its core brand. It has maintained market leadership, with a 29.1 per cent share, by pushing its budget brand ahm.

Despite the first-day disappointment, two of the country's most senior bankers said strong demand for Medibank shares, plenty of cheap debt and good quality assets still up for grabs mean 2015 will be another strong year for sharemarket floats.

Goldman Sachs chief executive Simon Rothery said he is "very confident" that the initial public offering window will remain open well into the New Year.

"The IPO market remains open for the right names and the right companies," Mr Rothery said. "The pipeline for next year is building well. The macro economic environment is very supportive of the equity markets with global interest rates staying very low. So we're very confident about continued listings for next year."

Goldman Sachs was one of three investment banks marketing the Medibank sale, alongside Macquarie Capital and Deutsche Bank. The head of Macquarie Capital in Australia, Robin Bishop, said a big factor in the buoyant IPO market in 2014 was "the quality of the assets that have come to market."

"We feel reasonably confident that we will have another year at least similar to this year," Mr Bishop said.

After a listing ceremony at the Australian Securities Exchange in Sydney, which was attended by a who's who of business leaders, Senator Cormann told media he was pleased with the $5.7 billion the Coalition raised in the sale. He said the offer price of $2.15 "reflected the valuation of Medibank Private by the market."

"Over the last year we have worked very carefully and methodically to ensure we achieved the right value from the sale of Medibank Private for taxpayers," he said. "We're now looking forward to shareholders across Australia and the market embracing the future of Medibank Private. It's good to see the market has supported our judgement in relation to the appropriate pricing of Medibank Private."

Mr Cormann and Medibank managing director George Savvides rang the stock exchange bell in front of a crowd that included the insurer's chair Elizabeth Alexander, directors Anna Bligh, Cherrell Hirst and Christine O'Reilly, as well as a plethora of advisers to the deal.

ASX chairman Rick Holliday-Smith said he had never seen so many television cameras at a listing ceremony.

For the government and its advisers and bankers, the job is done. However, after selling Medibank at a price-earnings ratio of 23-times, they have put the pressure on Mr Savvides to perform.

The high multiple, which is a measure of how expensive a company is compared to its peers, values Medibank in line with health companies like CSL and Japara Healthcare. However, it also values the company at a 15 per cent premium to the only other listed, albeit much smaller insurer, nib.

Matthew Davison, a senior research analyst at fund manager Martin Currie, which did not buy shares in the float, said there was "some scope" for cost cutting by management to boost earnings in the face of slow revenue growth. However, he said, the benefits of such strategies had to be balanced with adjusting premiums for customers.

"We think it's a quality company but the expectations being built in around the margin expansion are at the bullish end," he said "We don't think it's way off fair value, but there are high expectations of future approvals for premium increases, leaving some regulatory risk down the track."

Almost 20 per cent of the 2.7 billion shares on offer were traded during Tuesday's trading. The stock opened at $2.20 and traded broadly at that level until about 3pm when demand fell off and the share price slid to $2.14.

Because institutions accounted for just 40 per cent of the total raising, it is highly unlikely any substantial shareholders will emerge in Medibank.

Wilson Asset Managament's chief investment officer Chris Stott said he was not worried by the late dip in Medibank's value. "I think it will gradually move higher," he said. "We have a favourable view toward the private health insurance sector over the next decade and see Medibank as a clear beneficiary of that. We like the bigger picture themes."