A Book Runner is the main investment bank or financial institution responsible for managing and leading the process of an Initial Public Offering (IPO) or other public issue of securities. It plays a central role in coordinating the offering, setting the price band, and allocating shares to investors.
When multiple banks are involved, the lead one is called the Lead Book Runner or Left Lead.
The Book Runner is responsible for the book building process, where investor demand is collected to determine the final price of the securities being issued. Its key responsibilities include:
The primary bank or institution leading the entire process.
Assist the lead but with a smaller role in marketing and distribution.
Other banks or brokers involved in selling the issue but not managing the book.
In India, IPOs often involve one or more Book Running Lead Managers (BRLMs). These are registered with SEBI and follow regulations for pricing, disclosures, and investor protection.
For a large IPO like LIC or Zomato, multiple book runners may be involved to handle wide investor demand across retail and institutional categories.
Feature | Book Runner | Underwriter |
---|---|---|
Main Function | Manages the offering and price discovery | Guarantees sale of securities (may also be book runner) |
Price Role | Collects bids and sets price | May commit to buy unsold shares at a fixed price |
Risk | Less financial risk | Takes on risk of unsold shares |