InvestorQ : How exactly does the reverse book building system work in practice?
F&O
ishika Banerjee made post

How exactly does the reverse book building system work in practice?

Answer
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2 years ago


The Reverse Book Building is a mechanism provided for capturing the sell orders on online basis from the share holders through respective Book Running Lead Managers (BRLMs) which can be used by companies intending to delist its shares through buy back process. In the Reverse Book Building scenario, the Acquirer/Company offers to buy back shares from the share holders. The Reverse Book Building is basically a process used for efficient price discovery. It is a mechanism where, during the period for which the Reverse Book Building is open, offers are collected from the share holders at various prices, which are above or equal to the floor price. The buyback price is determined after the offer closing date. Unlike the Book Built IPO which discovers the issue price, the reverse book building process helps to discover the buyback price.