Who decides the price of an issue?

Who decides the price of an issue?

Indian primary market ushered in an era of free pricing in 1992. Following

this, the guidelines have provided that the issuer in consultation with

Merchant Banker shall decide the price. There is no price formula stipulated

by SEBI. SEBI does not play any role in price fixation. The company and

merchant banker are however required to give full disclosures of the

parameters which they had considered while deciding the issue price. There

are two types of issues, one where company and Lead Merchant Banker fix a

price (called fixed price) and other, where the company and the Lead

Manager (LM) stipulate a floor price or a price band and leave it to market

forces to determine the final price (price discovery through book building

process).