Book Building Issue
In Book Building Issue IPO there is no fixed price, but there is a price band. Lowest price is referred to as “floor price” and highest price is referred to as “cut-off price”. The investor can bid at any price within the price band. The shares are offered above or equal to the floor price.
In book building issue the issue price is fixed after closing date of bid and determined by investment banker. The IPO’s final price depends on the number of bids received. If the issue is oversubscribed, the initial public offering price is set at the cut-off price.