Steps involved in book building process

The following are the steps involved in book building:

i. Appointment of book runner.

ii. Advertisements.
iii. Members bid.
iv. Issue of Red herring Prospectus.
v. Issue of Draft Prospectus to institutional buyers.
vi. Analysis of bids.
vii. Firming cf underwriting contracts.
viii. Submission of prospectus to the ROC (Registrar of Companies)
ix. Collection of application forms with money.
x. Allotment of securities.

The company has to issue a Red herring Prospectus. The Red herring Prospectus contains the
name of the book runner and the price band within which securities are offered. It however
does not contain the exact price of the securities offered and the quantum of securities
offered. The book runner closes the order book in consultation with the issuing company. The
final price of the issue is decided jointly by the book runner and the issuing company.