The article primarily takes a closer look at the pricing mechanism of Initial Public Offerings (IPOs) in Indian equity market since 1999, with a primary focus on book-building.

A country's economic growth depends upon a number of factors, the most important, as considered by many, being the stock market. There exists a positive correlation between the economic growth of a country and the status as well as the performance of its stock market. A country with strong financial fundamentals reflected through well-developed stock market registers higher growth as compared to a country with weak capital market. In the 1990s, when India adopted the policy of Liberalization, Privatization and Globalization (LPG), the government's intention was to bring capital markets on par with international standards. So, there was a dire need to strengthen the stock market, which was possible through various modifications not only in the structure, but also through new market mechanisms and new instruments, complying with disclosure and transparency norms. An outcome of this was the scientific mechanism termed as "book-building" that came into existence in the year 1995.

This article aims to study the pricing techniques of IPOs and the process being followed in the Indian equity market. This article also documents the number of companies which had adopted the book-building method of pricing since 1999. The third objective of this article is to analyze the sector-wise IPOs through Book-building over the period and their gain or loss as on March 6, 2007. The data was collected from the secondary sources such as books, magazines and journals and the Internet. The statistical data was collected from NSE website. Simple statistical techniques have been employed for the analysis. The following sections discuss the pricing methods followed in Indian stock markets, and the various steps involved in the book-building process. This would be followed by the analysis and interpretation of the study.

Portfolio Organizer Magazine, Initial Public Offerings, IPOs, Indian Equity Market, Liberalization, Privatization, Globalization, LPG, Indian Stock Markets, Securities and Exchange Board of India, SEBI, National Stock Exchange, Fast Moving Consumer Goods, FMCG, Pharmaceutical Firms, Information Technology, IT, Banking Services Sectors, Finance Services Sectors.