Which IPO is the best for investing? (Fixed Price vs Book Building Issue)

What Exactly Is An IPO?
What Kinds of IPOs Are There?
IPOs: Should You Invest?
Which IPO is the best for investing?  
IPOs: How Do They Work?
How To Buy an IPO?
How Do I Participate in an IPO?
Why Do an IPO?

Fixed Price vs. Book Building Issue

Several growth-oriented businesses can generate money and fuel their future expansion by offering their shares to the general public through an Initial Public Offering (IPO). The procedure is simple: the business sells its securities to the general public. The corporation gains capital when this public purchases shares of its equity.

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As a result, everyone who has invested in a particular firm has the chance to obtain the company's wealth, which is equal to their shareholding. People receive enormous wealth from their shares in a firm that operates successfully and makes significant profits. In a perfect world, the company's connection with the public would be advantageous to both parties.

The following considerations will determine how the two price issues differ:

Costing

A fixed price issue involves setting the share's price on the first day of its listing, then later printing the fixed price per issue in the order document. In contrast, in a book-building issue, only the first pricing band is defined and no price is mentioned. The precise share price is ultimately determined only after the bid's closing date.

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The market

In a fixed-price offering, the demand is not known until the issue has closed. In contrast, the demand for a book can be known every day.

The payment

Investors must pay a 100% advance payment of the share price when placing a bid for a share in a fixed-price offering. In contrast, the payment is made after the shares have been distributed in a book-building issue.

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The reservations

In a fixed-price offering, 50% of the allocations are set aside for investors with less than Rs. 2 lacks in their accounts, while the remaining 50% is distributed to larger investors.

A book bidding issue, however, reserves 35% of the allocations for Qualified Institutional Buyers (QIB), and 35% for small investors, and the remaining allocations are kept for the other categories of investors.
































































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