FREE Account Opening + Zero AMC Fees* + MutualFund SIP1
Loading...

What is the process followed in the Book Building Issue in IPO?

The process of Book Building Issue is as follows:

  • The Issuer who is planning an offer nominates lead merchant banker(s) as 'book-runners'.
  • The Issuer specifies the number of securities to be issued and the price band for the bids.
  • The Issuer also appoints syndicate members with whom orders are to be placed by the investors.
  • The syndicate members input the orders into an 'electronic book'. This process is called 'bidding' and is similar to an open auction.
  • The book normally remains open for a period of 3 days.
  • Bids have to be entered within the specified price band.
  • Bids can be revised by the bidders before the book closes.
  • At the close of the book-building period, the book runners evaluate the bids on the basis of the demand at various price levels.
  • The book runners and the Issuer decide the final price at which the securities shall be issued.
  • Generally, the number of shares is fixed, the issue size gets frozen based on the final price per share.
  • Allocation of securities is made to the successful bidders. The rest get refund orders.
Answered on

I Like It. 1

  1. The Pioneer Discount Broker
  2. Get 100% Free Delivery Trading
  3. Free Direct Mutual Funds & SIP

User Reviews


More IPO Questions...

Request call back from Zerodha
  1. How to apply IPO in Employee Quota with Zerodha?
  2. How to apply for IPO in shareholder quota with Zerodha?
  3. Is IPO allotment done on first come, first serve basis?
  4. What is the difference between Right Issue and FPO?
  5. Does Zerodha provides both the NSE SME and BSE SME IPOs?
  6. How can I apply SME IPO for Minor?
  7. How to apply in SME IPO?
  8. What is third-party UPI application?
  9. Which category of investors, HNI or retail has a better chance of IPO allotment?
  10. Does HDFC bank ASBA accept Third party IPO applications?
  11. How to apply in SME IPO from Angel One?
  12. How to Apply IPO in the Big HNI Category?
  13. How to apply ASBA IPO using SBI YONO?
  14. Can I apply NSE SME IPO with Zerodha?
  15. Can I apply BSE SME IPO with Zerodha?
  16. How many IPO application I can apply with SBI ASBA?
  17. Which Bank allows multiple IPO applications via ASBA?
  18. Can I sell the IPO alloted shares from minor's demat account?
  19. Can I apply in IPO for myself and my child both?
  20. Can a minor invest in IPO?
  21. Which is the quickest way to know IPO allotment Status?
  22. Which Banks allow 5 ASBA IPO Applications?
  23. What is the Primary Market and the Secondary Market in terms of IPO investment?
  24. What is IPO Issue Price or Final Price?
  25. What is the cut-off price in IPO?
  26. What is the basis of allotment in the Retail Individual Investor (RII) category?
  27. What is an IPO lot size or bid lot?
  28. What is IPO price discovery?
  29. What is the IPO Floor Price and Cap Price?
  30. What is the difference between IPO Fixed Price Issue and Book Building Issue?
  31. What is the process followed in the Book Building Issue in IPO?
  32. What are the different types of Investor categories in IPO?
  33. What is the IPO price band?
  34. How to apply online IPOs with Zerodha?

List of all questions Ask your question