Book building

For the building in Detroit, see Book Tower.

Book building is a systematic process of generating, capturing, and recording investor demand for shares. Usually, the issuer appoints a major investment bank to act as a major securities underwriter or bookrunner.

Book building is an alternative method of making a public issue in which applications are accepted from huge buyers such as financial institutions, corporations or high net-worth individuals, almost on firm allotment basis, instead of asking them to apply in public offer. Book building is a relatively new option for issues of securities, the first guidelines of which were issued on October 12, 1995, and have been revised from time to time since. Book building is a method of issuing shares based on a floor price which is indicated before the opening of the bidding process.

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