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

The IPO offering to the public in the primary market can be made through the fixed price method, book building method or combination of both.

  • Fixed Price Issue
  • In fixed-price Issue, the issue price is already decided by the issuer and mentioned in the offer document.

  • Book Building Issue
  • Book Building Issue is a type of Issue where investors bid for the issue price within the price band specified by the issuer and the final price is determined only after the closure of the bidding period.

Offer Type Offer Price and issue Price Demand Payment Reservations
Fixed Price Issues Price at which the securities are offered and would be allotted is made known in advance to the investors. Demand for the securities offered is known only after the closure of the issue. ASBA and UPI 50% of the shares offered are reserved for applications below Rs. 2 lakh and the balance for higher amount applications.
Book Building Issues 20% price band is offered by the issuer within which investors are allowed to bid and the final price is determined by the issuer only after closure of the bidding. Demand for the securities offered at various prices is available on a real-time basis on the BSE and NSE during the bidding period. ASBA and UPI 50 % of shares offered are reserved for QIBS, 35 % for Non Retail and 15% for Retail Investors.
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