What is Reverse Book Building?

No image 5paisa Capital Ltd - 2 min read

Last Updated: 17th December 2025 - 02:56 pm

If you’ve ever wondered how companies get delisted from the stock exchange, you’ll come across a term called reverse book building. It sounds technical, but once you break it down, it’s actually quite easy to understand. Let’s understand the reverse book building process in depth.

When a company wants to delist its shares, it means it no longer wants to be traded publicly. This could be because the promoters want to regain full control, reduce compliance costs, or restructure ownership. However, since public investors already hold shares, the company can’t just buy them back at any price. Reverse book building procedure helps in such a situation, it helps determine a fair exit price for shareholders.

In a typical book building IPO, investors bid to buy shares, and demand sets the final price. In reverse book building, the process is flipped. Shareholders quote the price at which they’re willing to sell their shares back to the promoters. These bids are collected electronically through stock exchanges over a set period.
The delisting reverse book building explained in an easy to understand language: the highest price at which enough shares are offered for sale, meeting the required percentage of total shareholding, becomes the discovered price. This is essentially the minimum price the promoters must pay if they wish to proceed with the delisting.

Understanding how reverse book building works gives investors a powerful insight into how markets maintain fairness during delisting. It ensures small investors aren’t forced to sell cheaply and that the exit price reflects genuine demand.

In short, reverse book building isn’t just a technical formality, it’s a safeguard that balances the interests of both promoters and public shareholders. By knowing this process, investors can make smarter choices when faced with a potential delisting offer.

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