Book Building

SEBI guidelines 1995, defines book building as a process undertaken by which a demand for the securities proposed to be issued by a body corporate is elicited and built up and the price for such securities is assessed for the determination of the quantum of such securities to be issued by means of a notice, circular, advertisement, document or information memoranda or offer documents. Book Building is essentially a process used by companies raising capital through Public Offerings-both Initial Public Offers (IPOs) and Follow-on Public Offers (FPOs) to aid price and demand discovery. It is a mechanism where, during the period for which the book for the offer is open, the bids are collected from investors at various prices, which are within the price band specified by the issuer. The process is directed towards both the institutional as well as the retail investors. The issue price is determined after the bid closure based on the demand generated in the process.

Book Building Process

The Issuer who is planning an offer nominates lead merchant banker(s) as 'book runners'. The Issuer specifies the number of securities to be issued and the price band for the bids. The Issuer also appoints syndicate members with whom orders are to be placed by the investors. The syndicate members input the orders into an 'electronic book'. This process is called 'bidding' and is similar to open auction. The book normally remains open for a period of 5 days. Bids have to be entered within the specified price band. Bids can be revised by the bidders before the book closes. On the close of the book building period, the book runners evaluate the bids on the basis of the demand at various price levels. The book runners and the Issuer decide the final price at which the securities shall be issued. Generally the numbers of shares are fixed; the issue size gets frozen based on the final price per share. Allocation of securities is made to the successful bidders. The rest get refund orders.

Companies that followed book building process are mentioned below: L & T FINANCE HOLDINGS LIMITED
Security Type Issue Period Issue Size No. of Shares Price Band Face Value Tick Size Market Lot Minimum Bid Quantity Maximum Bid Quantity Equity 27 Jul 2011 to 29 Jul 2011 21,45,08,067 51.00 - 59.00 10.00 1.00 100 100 21,45,08,000

Book Running Lead Manager 1) JM Financial Consultants Private Limited 2) Citigroup Global Markets India Private Limited 3) HSBC Securities and Capital Markets (India) Private Limited 4) Barclays Securities (India) Private Limited 5) Credit Suisse Securities (India) Private Limited Co-Book Running Lead Manager Syndicate Member Equirus Capital Private Limited 1) IDBI Capital Market Services Limited 2) JM Financial Services Private Limited 3) Karvy Stock Broking Limited 4) SMC Global Securities Limited

TRIBHOVANDAS BHIMJI ZAVERI LIMITED

Security Type Issue Period Issue Size No. of Shares Price Band Face Value Tick Size Market Lot Minimum Bid Quantity Maximum Bid Quantity Book Running Lead Manager Equity 24 Apr 2012 to 26 Apr 2012 1,41,66,668 120.00 - 126.00 10.00 1.00 45 45 1,41,66,630 1) IDFC Capital Limited 2) Avendus Capital Private Limited Syndicate Member 1) Avendus Securities Private Limited 2) Reliance Securities Limited 3) Sharekhan Limited

Company following Reverse Book Building RICOH INDIA LIMITED

LTP Security Type Issue Period Book Size No of Shares Floor Price /Minimum Price Face Value Tick Price Market Lot 10.00 0.01 1 53.80 Equity 05 Nov 2012 to 09 Nov 2012 1,04,97,791

Minimum Offer Quantity Maximum Offer Quantity System Exit Price Attachment Exit Price Offered Delisting Date Book Running Lead Manager Co-Book Running Lead Manager Syndicate Member

1 1,04,97,791 -Offer Document --Ernst & Young Merchant Banking Services Pvt. Ltd

SMC Global Securities Ltd