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What is the difference between Book Building Issue and Fixed Price Issue?

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Initial Public Offering can be made through the fixed price method, book building method or a combination of both.

Difference between shares offered through book building and offer of shares through normal public issue (Source: BSE):

 Features

 Fixed Price process

 Book Building process

 PricingPrice at which the securities are offered/allotted is known in advance to the investor.Price at which securities will be offered/allotted is not known in advance to the investor. Only an indicative price range is known.
 DemandDemand for the securities offered is known only after the closure of the issue.Demand for the securities offered can be known everyday as the book is built.
 PaymentPayment if made at the time of subscription wherein refund is given after allocation.Payment only after allocation

 

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6 Comments

6. Dhananjay   I Like It. |Report Abuse|  Link|Jul 26, 2017 11:07:26 AMReply
Is the income (profit) from share market is taxable? If yes then how? Anyone can Explain...
6.1. Veeresh   I Like It. |Report Abuse|  Link|Feb 27, 2020 4:09:04 PM
Yes,it is tax free after 1year otherwise if sell below one year it is taxable as per rules of sebi guidelines
5. Swami   I Like It. |Report Abuse|  Link|Aug 19, 2014 11:18:24 AMReply
can anyone tell me if a PSU is already in market and they are going to come up with IPO (say for eg. SAIL or ONGC). What is your expert advise to invest either in the available market price share or to wait for the IPO to launch. What is the pros & cons in both the venue, could you please brief it for beginners like me.
4. S. P. JETHLIA   I Like It. |Report Abuse|  Link|Nov 19, 2010 4:32:37 PMReply
Sir, suggest me the incorporation part in DRHP of Fixed Price Issuer, where these thing differs?
3. shilpa   I Like It. |Report Abuse|  Link|Feb 13, 2010 1:17:12 PMReply
can any one give me answer that from which date the Book building method of IPo has been implemented?
2. Vikram Singh   I Like It. |Report Abuse|  Link|Dec 17, 2007 3:40:51 AMReply
There are 2 methods of payments available for book building IPO’s:
1.      Full payment: In this case an investor has to pay full amount when he apply for IPO.
2.      Partial Payment: This option is not available for all the IPO’s. Some of the big size issues offer this payment method. In this case an investor has to pay partially. A fix amount of money has to pay on the time of filling application and rest of the money he could pay later.

Full payment / Partial payment information is available on Red Herring Prospectus of the issue.
1. Faridi   I Like It. |Report Abuse|  Link|Nov 8, 2007 3:31:42 PMReply
In book building issue If I would like to invest Rs 99000. So how much money I have to pay at the time of application?

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