IPO THROUGH BOOK BUILDING

BOOK BUILDING
Book Building is a process of price discovery.
The applicants bid for the shares quoting the
price and the quantity

After the completion of bidding process, the

basis of allotment is finalised and letters of allotment / refund is undertaken.
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MAIN INTERMEDIARIES IN AN ISSUE

Book Running Lead Managers (BRLM) Syndicate Members

Registrars to the Issue

Bankers to the Issue

Role of Book Running Lead Manager

Pre-Issue

To take up the due diligence of companies operations/ management/ business plans/ legal etc. Drafting and designing of offer documents, prospectus, statutory advertisement and memorandum To ensure compliance with stipulated requirement and completion of prescribed formalities with Stock Exchange, ROC and SEBI. Appointment of other intermediaries like Syndicate Members, Registrars, Printers, Advertising Agency and Bankers to the issue

Role of Book Running Lead Manager.contd

Post-Issue Management of Escrow account To ensure intimation of allocation and
dispatch of refunds to bidders Finalisation of trading and dealing of securities To ensure Dispatch of certificate and demat of delivery of shares

Role of Syndicate Members

The BRLM appoint Syndicate Members who are mainly appointed to collect and enter the bid forms in a Book Building Issue

Role of Registrars
To finalise the eligible allottees after deleting the invalid applications To ensure credit of demat shares into the account of applicant To ensure dispatch of refund orders in case of non allotment

Role of Bankers to the issue

To ensure collection and transfer of funds to the Escrow account To provide the BRLM the data relating to collection

PRICE BAND
The prospectus may contain The floor price for the securities or A price band within in which the investor can bid The spread between the floor and the cap of the price band shall not be more than 20%

The price band is decided by the company in consultant with Merchant Bankers.
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PRICE BAND.Contd..
The price band can be revised and such a revision shall be widely disseminated by Informing the Stock Exchanges By issuing Press release and also indicating the change on the relevant website and the terminals of the syndicate members. In case of revision in price band, the bidding period shall be extended for a further period of three days subject to the total bidding period not exceeding 13 days who decide.
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Retail investor
Only the Retail Investors have the option to bid at cut off price.
Retail Investor means an investor who applies or bids for securities or for a value of not more than Rs.1.00 lac

Any bid made in excess of this will be considered in the HNI Category.
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Eligibility for reservation

In a book build issue allocation to the different categories is as under: Retail individual investors 35%
Non Institutional Investors 15% Qualified Institutional Buyer 50%
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Basis of allotment
After the closure of the issue, the bids received are aggregated under different categories.
The oversubscription ratios are then calculated for each of the categories against the shares reserved for each categories Within each of these categories, the bids are then segregated into different buckets based on the number of shares applied for

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Basis of allotmentcontd
The oversubscription ratio is then applied to the number of shares applied for and the number of shares to be allotted for applicants in each of the buckets is determined.
Then the number of successful allottees is determined.

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Others issues relating to Book Building

The price of the issue is decided by the company in consultants with Merchant Bankers
All the issues of size in excess of 10 crores are to be made compulsorily in the demat mode. The subscription list for an issue can remain open for atleast three working days and not more than ten working days.

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Others issues relating to Book Building.contd.

The investor can change or revise the quantity or price in the bid using the form of changing and revising the bid. In case of book building, the process of allotment of demat credit or refund is completed within fifteen days of the closure of the issue The listing on the Stock Exchange is done within seven days from the finalization of the issue.

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THANK YOU

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