This term is associated for any public offering to decide the final issue price, where the investors can bid for different issue prices within the predefined range.
Characteristics of Book Building process
It builds the book of subscription at different prices within the price band based on the investors’ response.
It also specifies the demand of the shares among the investors at different prices. Form the book-building process, the investors can find out how many subscriptions were done at the upper end of the issue price band.
The book-building process shows the demand across different investor groups as well like retail, HNI and QIB.
It makes the IPO and FPO process fully transparent to the investors during the issue open time.
Book-building process helps to make the IPO and FPO process transparent and increases the investor confidence.