The lead managers and the company firmly decide the price band in an IPO. A calculated decision is made regarding the price such that it can appeal to a greater audience while valuing the company correctly for its worth.
Companies and lead managers have to figure out the sweet spot to value the IPO correctly.
The company and its lead managers take the firm decision of pricing the price band of the IPO. They are extensively involved in understanding what the correct price point should be for the IPO. If you think the SEBI might decide the price point, well, you’re wrong as SEBI approves the processes and ensures that all the rules and regulations are kept in check before the IPO rolls out.
However, companies should keep in mind that the price point for every share in the IPO has to be calculated to come at a perfect saturation point. Investors don’t feel that the company is greedy to ask for more and shouldn’t be too cheap, which might cause a company’s devaluation. Typically, the price band of an IPO are issued two working dates before the IPO would be open to accepting applications.
However, the prices can vary significantly based on any external factor that might affect the company. The difference could be 20% greater or lesser than the stated value. For the change to occur, a press release and a notification to the stock exchange should be made with necessary changes in the website to ensure that the revision of prices is specific.