Types of an IPO –
Fixed Price Issue
The organization offers its shares at a settled or fixed cost and investors know the share price before issuing offer to public. Investors pay the full price of the share for an IPO. The Issue price or offer price is evaluated as per company’s financial aspects.
Book Building Issue
In book building IPO company offers only a 20% price to the investors on stocks. Investors place bid before the final price settlement. Investors declare their buying quantity and amount they are ready to invest. There is no settled price and final price is fixed when the bidding process over.