Mainboard IPOs are usually large, complex and high-value issues. To handle this scale efficiently and reduce risk, companies appoint multiple Lead Managers (also called Book Running Lead Managers – BRLMs) instead of relying on just one.
Reasons to appoint multiple lead managers are:
- Large IPO size needs wider investor reach: For the success of a Mainboard IPO, the issue needs better demand, better liquidity, and smoother listing. One Lead Manager may not reach all investors; multiple Lead Managers bring different investor networks (mutual funds, insurance companies, FPIs, retail reach)
- Ensure better participation from institutional investors: Strong institutional demand usually improves market confidence. Each Lead Manager has relationships with different institutional investors. More Lead Managers means more institutions approached which leads to build strong QIB and anchor investor demand
- Risk sharing and checks & balances: Managing a large IPO involves risk related to pricing, regulatory and execution. Responsibility is shared by appointing multiple lead managers to avoid mistakes or aggressive mispricing.
- Faster and smoother execution: Mainboard IPOs involve heavy paperwork, marketing roadshows, large subscription data, and coordination with SEBI, stock exchanges, banks, and registrars. Multiple Lead Managers divide the work, making the process more efficient and timely.
- Better pricing decisions: Multiple opinions help arrive at more realistic pricing instead of relying on one viewpoint. Each Lead Manager has its own Market feedback, Sector expertise, and Investor demand
