Public Issue and Book-Building

Made ByGargi Pandey Sanjana Pandya Vishal Salve Zibran Sayyed Tanvi Shah Maitri Sheth 126 127 134 136 149 154

What is PUBLIC ISSUE ?

what

Initial Public Of

Book-building

D E F I N I T I O N

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 by and the price for such securities is assessed for the determined of the quantum of such securities to be issued by means of notice, circular, advertisement, document or information memoranda or offer document.

G U I D E L I N E S

Rules governing Book building are covered in chapter XI of the securities and exchange board of India (Disclosure and investor protection)Guidelines 2000.
Book building was recognized by SEBI in India after having the recommendations of the committee under the

The process of Bookbuilding

1. The issuer who is planning an offer nominates lead merchant banker(s) as book runners. 2. The issuer specifies the no of securities to be issued and price band for bids. 3. The issuer also appoints syndicate members with whom orders are to be placed by the investors. 4. The syndicate members input the orders into and electronic book. This process id called bidding and is similar to open auction. 5. The book normally remains open for a period of 5 days. 6. Bids have to be entered within the specified price band. 7. Bids can be revised by the bidders before the book closes. 8. On the close of the book-building period, the book runners evaluate the bids on the basis of demand at various price levels. 9. The book runners and the Issuer decide the final price at which the securities shall be issued.

C O N C L U S I O N

Thus, we would like to conclude by saying that Public issue is an offer to the public for raising its capital. IPO is when a company issues common stock or shares to the public for the first time. IPO has many advantages too. Book building is a very essential process in order to raise capital of a company through IPOs. It is a process which is now practiced and adopted worldwide. Book