TYPES OF UNDERWRITING

• Hard underwriting
• When an underwriter agrees to buy his commitment of shares before the issue opens.
• The underwriter guarantees a fixed amount to the issuer from the issue.
• Thus, in case the shares are not subscribed by investors, the issue is devolved on underwriters and they have to bring
in the amount by subscribing to the shares.

• Soft underwriting
• When an underwriter agrees to buy the shares at later stages as soon as the pricing process is complete.
• He then, immediately places those shares with institutional players.
• The shares are first offered to the public, the underwriter comes into picture only if the subscription is less than 90%.