2. Book Building & Fixed Price
Issues
Fixed Price Issues
Book Building Issues
3. ssue Type
Offer Price
Demand
Payment
Reservations
Fixed Price
Issues
Price at which
the securities are
offered and
would be allotted
is made known
in advance to the
investors
100 % advance
Demand for the payment is
securities offered required to be
is known only
made by the
after the closure investors at the
of the issue
time of
application.
50 % of the
shares offered
are reserved for
applications
below Rs. 1 lakh
and the balance
for higher
amount
applications.
Book Building
Issues
A 20 % price
band is offered
by the issuer
within which
investors are
allowed to bid
and the final
price is
determined by
the issuer only
after closure of
the bidding.
10 % advance
payment is
Demand for the
required to be
securities offered
made by the
, and at various
QIBs along with
prices, is
the application,
available on a
while other
real time basis
categories of
on the BSE
investors have to
website during
pay 100 %
the bidding
advance along
period..
with the
application.
50 % of shares
offered are
reserved for
QIBS, 35 % for
small investors
and the balance
for all other
investors.
4. About Book Building
The issue price is determined after the bid
closure based on the demand generated in the
process.
5. The Process:
The Issuer who is planning an offer nominates lead merchant banker(s) as 'book runners'.
The Issuer specifies the number of securities to be issued and the price band for the bids.
The Issuer also appoints syndicate members with whom orders are to be placed by the
investors.
The syndicate members input the orders into an 'electronic book'. This process is called 'bidding'
and is similar to open auction.
The book normally remains open for a period of 5 days.
Bids have to be entered within the specified price band.
Bids can be revised by the bidders before the book closes.
On the close of the book building period, the book runners evaluate the bids on the basis of the
demand at various price levels.
The book runners and the Issuer decide the final price at which the securities shall be issued.
Generally, the number of shares are fixed, the issue size gets frozen based on the final price per
6. Guidelines for Book Building
Rules governing Book building are covered in
Chapter XI of the Securities and Exchange Board
of India (Disclosure and Investor Protection)
Guidelines 2000.
7. RIGHTS ISSUE
Rights issue is governed by Section 81(1) of the
Companies Act, 1956
The securities are offered to the existing
shareholders of the Company through letter of
offer
“Rights Issue” means an offer of specified
securities by a listed issuer to the shareholders of
the issuer as on the record date fixed for the said
purpose
8. A listed issuer making a rights issue shall announce a
record date for the purpose of determining the
shareholders eligible to apply for specified securities in the
proposed rights issue.
9. LETTER OF OFFER
The abridged letter of offer, along with application
form, shall be dispatched through registered post
or speed post to all the existing shareholders at
least three days before the date of opening of the
issue.
Provided that the letter of offer shall be given by
the issuer or lead merchant banker to any
existing shareholder who has made a request in
this regard.
10. PROCEDURE FOR RIGHTS ISSUE
Increase authorized capital, if required .
Notify SE about the BM at least before 2 days when rights
issue is proposed.
BM to decide quantum and proportion of rights issue, record
date, appointment of merchant bankers, authority to
undertake process and signature on Letter of Offer.
Forward Letter of Offers to SE and dispatch to shareholders.
Arrangement with Bankers to receive application forms
Prepare Basis of Allotment
11. Allotment in BM .
Application for listing with SE and filing with ROC.
3 day and 50 day monitoring report
