3.7 Issue Price
DIFFERENT ISSUE METHODS
The value of the company is reflected in the price of the shares of the company at the time of the public issue. The price per share of the company is fixed based on the professional business valuation of the company by the valuation experts and proposed to the regulator. If the regulator gives a consent on the price, then the company can go ahead with the price and if not it has to be revised.
While fixing the price for public issues in India companies follow two methods:
- Normal price
- Book-building
The price of the share includes both face value and the premium, if any. In both the above cases, the issuing company should get consent from the regulator (SEBI).