Once the SEBI approval is received, the next step is to file the Red Herring Prospectus (RHP). The RHP is like an annual report of the company and includes its income statements, its balance sheet, its business plan, objectives of the issue, methodology of utilization of funds etc. This is the document that is your best reference point for investing in the IPO and investors are required to go through the same in detail.

Once the RHP is filed the next step is to start marketing the issue. There is a good bit of marketing that goes on for any IPO. Firstly, there is extensive marketing that is done through mass media like the TV, print media and the internet. Secondly, the promoters of the company along with the BRLMs conduct investor meets and broker meets across India to sell the idea to retail and HNI investors.

Finally, there is the major institutional thrust that is given by meeting domestic funds and large institutions like LIC. Additionally, companies looking at global investors also conduct road shows at key financial centres across the world like New York, Boston, London, Singapore and Hong Kong. Each IPO is backed by an aggressive marketing blitz.

Then there is the final price band that is set. Since Book building is all about price discovery, the band is indicated and then the final price is discovered based on the demand for the IPO. Heavily oversubscribed IPOs offer shares closer to the upper band of the IPO. Once the price band is fixed the IPO application forms are printed and distributed through brokers and distributors.