BSE's Book Building System

News

Risk Management

BSE offers the book building services through the Book Building software that runs on the BSE Private network.
This system is one of the largest electronic book building networks anywhere spanning over 350 Indian cities through over 7000 Trader Work Stations via eased lines, VSATs and Campus LANS
The software is operated through book-runners of the issue and by the syndicate member brokers. Through this book, the syndicate member brokers on behalf of themselves or their clients' place orders.
Bids are placed electronically through syndicate members and the information is collected on line real-time until the bid date ends.
In order to maintain transparency, the software gives visual graphs displaying price v/s quantity on the terminals.

Initial Public Offerings
Corporates may raise capital in the primary market by way of an initial public offer, rights issue or private placement. An Initial Public Offer (IPO) is the selling of securities to the public in the primary market. This Initial Public Offering can be made through the fixed price method, book building method or a combination of both.

In case the issuer chooses to issue securities through the book building route then as per SEBI guidelines, an issuer company can issue securities in the following manner:

100% of the net offer to the public through the book building route.
75% of the net offer to the public through the book building process and 25% through the fixed price portion.
Under the 90% scheme, this percentage would be 90 and 10 respectively.

Difference between shares offered through book building and offer of shares through normal public issue:

Features	Fixed Price process	Book Building process
Pricing	Price at which the securities are offered/allotted is known in advance to the investor.	Price at which securities will be offered/allotted is not known in advance to the investor. Only an indicative price range is known.
Demand	Demand for the securities offered is known only after the closure of the issue	Demand for the securities offered can be known everyday as the book is built.
Payment	Payment if made at the time of subscription wherein refund is given after allocation.	Payment only after allocation.

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