What is meant by Book Building and Fixed Price issue?
“Book Building” is a process by which the demand for the securities proposed to be issued by a body corporate is elicited and built up and the price of the security is assessed on the basis of the bids obtained for the quantum of securities offered for subscription by the issuer. This method provides an opportunity to the market to discover the price for securities. Book built issues specify a price band within which the customer may place his bids. The lower end of the price band is called the Floor Price and the higher end of the Price band is called the Cap Price “Fixed Price issues”, as the name suggests, are those where the company or body corporate decides a particular price for the issue.
