Laxmi Dental sets IPO price band

How a Company Decides its IPO Price?

• The past financial performance of the company
• The peers of the company in the industry
• The potential growth of the company
• Industry outlook:
  • General view of the industry
• The most significant method of valuing a company is through discounted cash flow, which works as the net present value of the company’s future expected cash flows.
• There are two types of IPOs: fixed price and book building
  • Fixed Price:
    • The price of the shares is fixed on the first day of listing.
• Book Building:
  • The price is determined after aggregating the demand from bids. In this process, the company sets a price range, and investors place their bids within that range.

Initial Public Offering (IPO)