Types of IPO : Fixed Price Issue vs Book Building Explained

After listing, IPO share prices can go up, or down. Investors should also be clear about the IPO type they are applying for.

Finance Oct 24, 2026 0 53 Add to Reading List

A lot of companies use an Initial Public Offering, to offer shares to the public for the first time. After the IPO process gets done , the company shares get listed on a stock exchange. Usually investors submit applications before listing day too. There are a few Types of IPO you’ll see in the stock market. Two very common Types of IPO are :

● Fixed Price Issue

● Book Building Issue

These ways basically help a company figure out how the shares will be priced and offered to investors.

What Is an IPO?

An IPO is when a private company sells shares to the public for the first time. Prior to the IPO, the company was privately owned. Later, when the IPO process finishes , those shares are listed on the stock exchange. Then people can buy, and sell those shares during regular trading hours. Many investors apply for IPO shares by using :

● trading apps

● bank apps

● brokerage platforms

What Are Types of IPO?

Types of IPO means the different ways a company offers shares to investors. The company picks the IPO method before the IPO opens for subscription. Among the common Types of IPO you will usually hear about :

● Fixed Price Issue

● Book Building Issue

Both are used in the Indian stock market, quite often.

What Is a Fixed Price Issue?

In a Fixed Price Issue , the company decides the share price before the IPO subscription opens. Investors know the exact rate when they apply. For instance, if the company sets the IPO price at ₹100 per share, investors apply at ₹100 only ,no variations really. In this method :

● the share price is locked before the IPO opens

● investors know the exact price

● all applications are submitted at the same fixed price

How Fixed Price Issue Works

In a Fixed Price Issue, investors file their applications at the announced price. Once the IPO closes, the company gathers everything. After that :

1. applications are checked

2. shares are allotted to investors

3. refunds get handled if needed

Then the company moves forward with the stock market listing setup.

What Is a Book Building Issue?

In a Book Building Issue, instead of one single price, the company shares a price range. That range is called the price band. Example:

Rs 100 to Rs 110 per share

Investors can submit bids inside that price bands

How Book Building Works

In a Book Building Issue, investors basically pick the price they want to pay, inside the price band. During this stage, investors place bids, and at the same time the demand for shares gets recorded. Then, the final issue price is not yet set, it is decided later. After the bidding window ends, the company then fixes the final share price by looking at the investor demand.

What Is a Price Band?

A price band is the price range shared in a Book Building Issue. For example :

lower limit: ₹100

upper limit: ₹110

So investors can bid somewhere within this boundary while applying for the IPO.

Difference Between Fixed Price Issue and Book Building Issue

A Fixed Price Issue and a Book Building Issue work in different ways, even though both lead to IPO allotment. In a Fixed Price Issue :

1. the share price is set before the IPO starts

2. investors know the exact share price already

3. applications happen at one single fixed value

In a Book Building Issue :

1. the company provides a price range

2. investors bid within that range

3. the final price is decided after bidding ends

Why Companies Use Different Types of IPO

Companies choose different Types of IPO based on their IPO plans, and on how they want pricing to work. These methods support companies in :

1. collecting investor applications

2. finalizing share pricing

3. allocating shares to the right investors

The IPO type is listed in the company’s IPO related documents too.

What Investors Check Before Applying

Before applying, many investors review key items like :

● IPO type

● share price

● price band

● IPO dates

● lot size

These points let investors understand what happens during the IPO process.

Important Things to Remember

After listing, IPO share prices can go up, or down. Investors should also be clear about the IPO type they are applying for. Both Fixed Price Issue and Book Building Issue are standard parts of the IPO process followed in the Indian stock market.

Conclusion

An IPO helps a company offer shares to the public for the first time. Different Types of IPO decide how shares are offered to investors. In a Fixed Price Issue , the company chooses one fixed share price before the IPO opens. In a Book Building Issue , the company provides a price range and investors place bids within that range.