AN EMPIRICAL STUDY INTO PRICE DETERMINATION OF PUBLIC ISSUES IN INDIA THROUGH BOOK BUILDING PROCESS

After abolition of CCI (Controller of Capital Issues), SEBI (Securities Exchange Board of India) provided mechanism in hand of issuers to freely price their issues with certain disclosures as justification of pricing; called Fixed Price method. But under the method of fixed pricing, it was herculean task for lead managers to set the most appropriate price and if the price is not fixed at the best, the result will be either under subscription or over subscription. To bypass this dilemma, a crucial reform in Indian capital market, for price determination of public issues by the economic forces of demand and supply, was introduced in 1995 and this process is known as Book Building Method of price determination of public issues. The endeavor of the researcher is to access the popularity of Book Building process of public issues over fixed price method and to evaluate the performance of such issues.