What is Book Building (before IPO and FPO) in Share Market?

is the system under which the demand for an offer to issue shares is kept by a corporate entity and the price of the shares is decided on the basis of the bid made by the for the of shares issued.

Simply put, the issuing company asks the investor how many shares he wants and at what price he wants to buy them while determining the value of the . With its help, an attempt is made to find out the fair value of the shares in the market. Investors who have personally bid for the  can also apply for it.

What is the way:

In the book-building , a draft proposal is prepared, which is placed with the securities board. This gives information that the issue price will be decided through the book-building process. This process prescribes the for receiving the bid. The bid is evaluated at the end of time and the price is announced.

  • With the help of book building,  work to increase their .
  • Increase its capital through both and  channels. Book running lead manager manages it for public offers

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