BOOK BUILDING PROCESS

Submitted to:- Submitted by:-

Dr.Rekha Acharya Ajay Singh Makvana
Amit Kumawat
BOOK BUILDING
 SEBI guidelines, 1995 defines book building as
“a process undertaken by which a demand for the securities proposed to be
issued by a body corporate is elicited and built up and the price for such
securities is assessed for the determination of the quantum of such securities
to be issued by means of a notice, circular, advertisement, document or
information memoranda or offer document.”

Book building process is a common practice used in most developed

countries for marketing a public offer of equity shares of a company.
However, book building is a transparent and flexible price discovery
method of initial public offerings (IPOs) in which price of securities is fixed
by the issuer company along with the Book Running Lead Manager
(BRLM) on the basis of feedback received from investors as well as market
intermediaries during a certain period.
BOOK BUILDING PROCESS
1.) The company appoints a book runner that is a merchant banker.
2.) The book runner prepair & submit the draft documents to SEBI &
take an acknowledgement card.
3.) The issuer & the book runner decide to offer shares at a price
within a specified price band.
4.) Offers regarding the demand for securities at different price level
are invited from syndicate members consisting of eligible broker,
underwriters, financial institution, mutual fund & others.
The advertisement should mention the opening & closing dates
for bids. A bid is open for minimum 5 days.

5.) Based on bids received, the issuer arrives at the final cut-off rate
& the final allocation in consultation with the book runner & lead
manager.
6.) The issuer & the book runner may impose restrictions on the number
of shares that can be allotted to each client so as to avoid any future
takeover threats.
7.) The final prospectus is filed with the registrar of companies (ROC)
along with the procurement agreement.
8.) The placement portion opens for subscription only after the prospectus
is filed with the ROC.
9.) The placement portion closes a day before the opening of the public
issue portion.
10.) The public portion opens & the allotment & listing of this portion is
done.

The price determined in the book building process is applicable to the

public portion as well.
 Book Building Option

75% Book Building

100%Book Building
The placement portion The public portion