- It is a process of price discovery used in public offers.
- It is essentially a process used by companies raising capital through IPOs or FPOs to aid price and demand discovery. (IPOs- Initial Public Offers & FPOs- Follow on Public Offers)
- It is a mechanism where, during the period for which the book for the offer is open, the bids are collected from investors at various prices, which are within the price band specified by the issuer.
- The process is directed towards both the institutional as well as the investors.
- The issue price is determined after the bid closure based on the demand generated in the process.
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