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What is the difference between book building and IPO?

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IPO is the issuance of shares by a privately held company to the general public for the first time, whereas book building is one of the methods adopted for IPO issuance.

Book building is a price discovery mechanism wherein the offer price is decided based on the demand of the issue post the issue closure. Under book building, the company announces a price band (e.g. Rs 75 to Rs 80) within which the investors need to apply for the bids.


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