Book Building
Book building is a method used to determine the issue price of a financial instrument, such as stocks, during an Initial Public Offering (IPO). In this process, an underwriter, usually an investment bank, invites institutional investors (e.g., mutual funds, hedge funds) to submit bids, indicating the price they are willing to pay for the securities. The bids help establish a price range based on the demand and supply in the market. The underwriter uses these bids to determine the final price that will satisfy both the issuing company and market participants. Book building ensures that the price reflects investor interest and helps achieve a fair valuation for the securities being offered.
Related Terms
Direct Public Offerings
A Direct Public Offering (DPO) enables a company to sell shares directly to the public,...
Enterprise Value
Enterprise Value (EV) is a comprehensive metric that helps assess the total value of a...
Returns Direct
Typically, direct funds offer higher returns due to lower fees and costs....
Foreign Direct Investment
Foreign Direct Investment (FDI) refers to the act of acquiring a majority stake in a...
AUM
Assets Under Management (AUM) refers to the total market value of all assets managed by...
Control Direct
More control, allowing investors to choose funds independently based on their own research....
