Cut-Off Price

In a book-building issue, the issuer is required to indicate either the price band or a floor price in the Prospectus. The actual discovered issue price can be any price in the price band or any price above the floor price. This issue price is called ‘cut-off price’. This is decided by the issuer and lead manager after considering the order book and investors’ appetite for the stock. Only retail individual investors have the option of applying at cut-off price.

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