B

Glossary · PSX term

Book-building.

Book-building is a process where institutional investors bid to set the IPO price before the public offer.

Definition

During book-building, bidders submit the price and quantity they are willing to buy, and the strike price is set from the demand collected. The remaining shares are then offered to the general public, often at or near the strike price.

Worked example

If institutions bid heavily in a book-build, the strike price may be set near the top of the indicated range.

Related on PSX Clarity

Initial Public Offering (IPO)

Strike price (IPO)

More glossary terms

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