Reverse Book Building

Hi.

Did Trade Brains have a post on Reverse Book? Interested to know some basics on this.

Thanks!
Madhu

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Reverse book building is the process by which a company that wants to delist from the bourses, decides on the price that needs to be paid to public shareholders to buy back shares.

This convoluted process for delisting ensures that Indian promoters don’t hop on and off the stock exchange platform at whim. Given that investors bid in an auction to invest in an IPO, it is only fair that they be allowed to use a similar auction to decide the exit price when a company wants to bid goodbye to them.

You can learn more here:

https://www1.nseindia.com/products/content/equities/ipos/reverse_bookbuilding.htm

Reverse book building is a process used for efficient price discovery. Once a company announces a delisting plan, public shareholders can tender their shares at or above the floor price. Shareholders can do this through an online bidding system on the stock exchanges, which stays open for five days.

I guess they have particular post on this topic, know more at their blog section. Click here to view.