Book Building

Book building is the process of gathering indications of interest from potential investors in an initial public offering (IPO). The book runner, which is typically an investment bank, will contact institutional investors and solicit their interest in the IPO. The book runner will then compile the indications of interest and use them to determine the offering price.

The book building process is designed to ensure that the IPO is priced fairly and that there is sufficient demand for the shares. The book runner will typically set a price range for the IPO, and the final offering price will be set within this range. The book building process can take several weeks or even months, depending on the size and complexity of the IPO.

Once the offering price has been set, the book runner will begin to sell the shares to institutional investors. The book runner will typically sell the shares in blocks, and the size of the blocks will vary depending on the demand for the shares. The book runner will continue to sell the shares until all of the shares have been sold or until the offering is withdrawn.

Book building is a complex process, but it is an important part of the IPO process. The book building process helps to ensure that the IPO is priced fairly and that there is sufficient demand for the shares.