How does IPO pricing work



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How does IPO pricing work?

1 Answer(s)


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IPO pricing is a combination of art and science.

The science part if using DCF, comparables etc to arrive at a valuation range.

The art part is when investor interest is solicited and investors quote how much they can pay.

It is the job of the bankers to then balance all the interests and arrive at the final ipo issue price.