IPO book building / Investing insights

We explain what IPO book building means and discuss the key steps involved in the process. In particular, we focus on how IPO underwriters collect bids from institutional investors to "build the book" and how they use that information to set the offer price and allocate shares.

This video is based on our insights post on the same topic published here:
www.initialreturn.com/book-building

0:00 What is IPO book building?
0:39 Hiring lead managers through a "beauty contest"
0:53 Lead managers form the underwriting syndicate
1:14 IPO roadshow
1:36 Limit bids vs strike bids in book building
2:15 Determining the offer price
3:04 Money left on the table
3:30 Reasons for IPO underpricing
4:43 Summary

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