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What is the book-building process in IPO?

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The Book building process in IPO is a method of price discovery. This process aims at fair price determination based on the demand of the issue from the investors.

Under the book-building process, the issuer company and the lead manager decide the final cut-off price for the issue after the closure of the IPO subscription period. The cut-off price decided is the price within the price band. If the stock is in great demand, the ceiling price becomes the cut-off price.


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