Page 135 - DCOM304_INDIAN_FINANCIAL_SYSTEM

Indian Financial System

Notes Book Building Process

Public Issue/offer of securities through book building process is designed to ascertain demand
for the security at various prices with in a price -band to facilitate discovery of the issue price.

Key Players

Escrow
Account

Red Herring
Prospectus
Book Building
Process
Categories of
Investors

Price Band &
Cut-off Price

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Categories of Investors

There are three types of Investors:
1. Qualifies Institutional Investors: Public financial institutions as specified in section 4A of
the companies act, FIIs, scheduled commercial banks, mutual funds, multilateral and
bilateral development financial institutions, venture capital funds registered with SEBI,
foreign venture capital investors registered with SEBI, state industrial development
corporations, insurance companies registered with Insurance Regulatory and development
Authority, provident fund with a minimum corpus of ` 25 crores and pension fund with a
minimum corpus of ` 25 crores can apply for shares.
Issue size available for allocation is 60% of the Net Issue. 5% shall be available for allocation
for Mutual funds participating in 5% reservation in QIB portion will also be eligible for
allocation in the remaining QIB portion. The unsubscribed portion if any, in the mutual
fund reservation will be available to QIBs.

The minimum bid amount for QIBs exceeds ` 1,00,000 and in multiples thereafter.
The maximum bid size not exceeding the Issue subject to regulations as applicable to the
bidder.
The Margin amount applicable to QIB Bidden at the time of submission of Bid cum
application form 10% of the Bid amount in respect of bids placed by QIB bidders on
bidding.
2. Non-Institutional Investors: Non Resident Indian's, Resident Indian individuals, HUF's
(in the name of karta) companies, corporate bodies, societies and can apply for shares in
this category.

Issue size available for allocation is 10% of the Net Issue.
The unsubscribed portion in this category will be available for allocation to QIB's and
Retail Individual Bidders.

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