BOOK BUILDING PROCESS

Submitted to:Dr.Rekha Acharya

Submitted by:Ajay Singh Makvana Amit Kumawat

µ Book building process is a common practice used in most developed countries for marketing a public offer of equity shares of a company. document or information memoranda or offer document. 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. . 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.BOOK BUILDING SEBI guidelines. However. advertisement.

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) The book runner prepair & submit the draft documents to SEBI & take an acknowledgement card. the issuer arrives at the final cutoff rate & the final allocation in consultation with the book runner & lead manager.) The company appoints a book runner that is a merchant banker. financial institution.) Based on bids received.) Offers regarding the demand for securities at different price level are invited from syndicate members consisting of eligible broker.) The issuer & the book runner decide to offer shares at a price within a specified price band. 4. . The advertisement should mention the opening & closing dates for bids. A bid is open for minimum 5 days. 3. 2. 5. mutual fund & others.BOOK BUILDING PROCESS 1. underwriters.

8. 10. 9.) 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 placement portion closes a day before the opening of the public issue portion.) The public portion opens & the allotment & listing of this portion is done. .) The final prospectus is filed with the registrar of companies (ROC) along with the procurement agreement.) The placement portion opens for subscription only after the prospectus is filed with the ROC. The price determined in the book building process is applicable to the public portion as well.6.

Book Building Option 75% Book Building 100%Book Building The placement portion The public portion .

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