Book building is basically the process of generating a book of investor demand for an IPO for efficient price discovery. It is a mechanism where, during the fixed period for which the IPO is open, bids are collected from investors at various prices, between the floor price and the cap price. The final issue price is not determined until the end of the process when the book has 'closed'.
Book building is a common practice in most developed countries and has recently been making inroads into developing countries as well, including India.
Book building is a common practice in most developed countries and has recently been making inroads into developing countries as well, including India.
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