Book Running Lead Manager: Meaning, Functions & Importance in IPOs

The BRLM is responsible for coordinating IPO documentation, managing investor participation, and supervising the book-building process. These responsibilities are carried out in accordance with applicable regulatory requirements and established market procedures. The functions of a Book Running Lead Manager support organised price discovery, structured allocation, and communication with stakeholders throughout the offering.

Their involvement reflects how IPOs in India are structured and executed within the regulatory framework.

A Book Running Lead Manager (BRLM) is a SEBI-registered merchant banker responsible for managing the Initial Public Offering (IPO) process on behalf of the issuing company; including pricing, regulatory filings, and investor coordination. The term “book running” refers to the systematic collection and tracking of bids during the book-building phase of an IPO.

Key responsibilities of a BRLM include:

• Liaising with SEBI, stock exchanges, and depositories for regulatory approvals

• Advising the company on valuation and IPO price band

• Coordinating with institutional and retail investors during bidding

• Overseeing the documentation process such as the DRHP and RHP

• Supervising share allotment in accordance with public-issue guidelines

In simple terms, a Book Running Lead Manager bridges the operational link between a company offering shares to the public and the investors participating in the issue.

The Book Running Lead Manager takes responsibility for several operational and compliance-linked tasks that shape how an IPO progresses from planning to listing.

Book Building and Pricing

A key responsibility of the BRLM is managing the price discovery phase. They examine the issuer’s fundamentals and market interest to assist in arriving at a price range based on demand observed during the bidding process.

Share Allocation

Once bids are received, the BRLM coordinates with regulatory and market authorities to distribute shares as per category-wise rules; including retail, institutional, and high-net-worth investors. This activity ensures adherence to applicable allotment procedures.

Regulatory Oversight and Documentation

The BRLM prepares and files mandatory disclosure documents with SEBI and the stock exchanges. These filings are reviewed by regulators before the public issue proceeds to the bidding stage.

Marketing and Investor Roadshows

To support broader understanding among market participants, BRLMs conduct analyst meets and other structured interactions that present the issuer’s financial position and growth outlook. Feedback from such sessions may inform valuation-related inputs.

These combined tasks contribute to a regulated and sequential IPO process.

Book Running Lead Managers (BRLMs) play an important role in ensuring that IPOs progress in a structured and efficient manner. Their involvement influences several elements that determine how the market receives a public issue.

A BRLM contributes to:

• Valuation Confidence

Their assessment of a company’s financials and market positioning helps establish a price band that aligns with investor expectations and regulatory norms.

• Investor Participation and Transparency

This involves coordinated communication and the sharing of disclosures in line with regulatory standards throughout the offering process.

• Market Readiness and Process Coordination

By managing interactions across issuers, regulators, and market intermediaries, they support an orderly transition from private to public ownership.

Many IPOs in India appoint BRLMs, reflecting the importance of informed management and regulatory alignment in capital-raising efforts.

Their involvement often shapes how an IPO advances through documentation, bidding, allotment, and ultimately, listing on the exchange.

A Book Running Lead Manager (BRLM) plays a key role in coordinating the various stages of an Initial Public Offering (IPO). Their participation ensures that activities such as regulatory filings, valuation inputs, investor communication, and allotment procedures are executed in alignment with legal and market requirements.

A BRLM contributes by:

• Ensuring regulatory adherence

They manage filings and compliance so the IPO meets SEBI and exchange requirements.

• Supporting fair valuation

Analysis of market demand and financials helps determine a price band that reflects the company’s fundamentals and the current market environment.

• Facilitating investor participation

Through structured communication and transparent disclosures, they help prospective investors evaluate the offering.

• Managing operational and risk aspects

Due diligence and coordinated activities reduce the likelihood of process-related delays or discrepancies.

A BRLM’s involvement helps maintain transparency and procedural efficiency during the transition from a privately held company to a publicly listed one.

Companies select Book Running Lead Managers (BRLMs) based on their expertise in handling public issues and their familiarity with regulatory and market environments. Before appointment, several criteria are assessed to ensure the IPO is managed efficiently.

Key considerations include:

• Past IPO experience

Evaluating previously managed issues, especially within the same sector or similar market size.

• Market and investor reach

Assessing institutional networks and the BRLM’s ability to engage diverse investor categories.

• Regulatory credentials

Verifying SEBI registration and compliance record as a merchant banker.

• Fee structure and scope of services

Comparing commercial terms along with the breadth of operational support offered.

Selecting a BRLM influences core elements of the public issue, including pricing decisions, resource coordination, and the extent of investor participation.

The Securities and Exchange Board of India (SEBI) regulates Book Running Lead Managers to ensure that IPO management activities align with prescribed market standards and ethical practices.

SEBI’s oversight includes structured compliance mechanisms such as:

• Registration requirements for merchant bankers acting as BRLMs
• Continuous evaluation of due diligence quality in IPO filings
• Monitoring disclosures in the Draft Red Herring Prospectus (DRHP) and Red Herring Prospectus (RHP)
• Review of investor grievance handling and bid process management
• Enforcement actions when disclosures or conduct deviate from regulatory norms

These supervisory measures contribute to orderly functioning of the IPO process and ensure that regulatory expectations are consistently upheld.

• Pre-IPO: BRLM files DRHP, completes due diligence

• Roadshow: Investor meets held; price band fixed at ₹95–100

• Launch: Bids collected over 3 days

• Allotment: Final price ₹100; shares allocated

• Listing: Shares listed; post-IPO support provided

• Book Building: Process to discover IPO price through investor bids

• Red Herring Prospectus (RHP): Document with IPO details minus price

• Allocation Categories:

  • RIIs: Up to ₹2 Lakhs

  • QIBs: Institutions

  • NIIs: Above ₹2 Lakhs

• Registrar: Manages applications and allotments

• SEBI: Regulates IPO processes

Engaging a qualified Book Running Lead Manager (BRLM) brings structured expertise to the IPO process, supporting efficient coordination among regulatory bodies, investors, and market intermediaries.

Key benefits include:

• Coordinated price discovery

BRLMs analyse market conditions and investor feedback to support decisions related to the IPO price band.

• Regulatory alignment

They prepare and review documentation such as the Draft Red Herring Prospectus to ensure requirements set by SEBI and stock exchanges are met.

• Access to institutional investor networks

Their market presence helps facilitate participation from different investor categories such as QIBs, RIIs, and NIIs.

• Risk and due-diligence management

BRLMs examine disclosures, operational details, and financials to reduce information gaps during the issue.

• Streamlined allotment and listing coordination

They work closely with registrars and exchanges for allocation procedures and listing-day continuity.

These capabilities contribute to a more organised and compliant IPO process by supporting coordination among regulatory, operational, and market stakeholders.

• BRLMs do not assure listing gains

• More than one BRLM may be appointed

• BRLMs do not manage post-listing performance

• Share allocation is handled per SEBI norms

BRLMs play a key role in IPOs by managing pricing, compliance, and investor coordination. Their experience and diligence are essential to ensure that the public issue meets all regulatory standards and follows a structured listing process.

This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.