A price band is the floor-to-ceiling price range within which investors place their bids in a book-building IPO. The final issue price (cut-off) lands within — usually at the top of — this band after the bidding window closes.
SEBI requires the spread to be no more than 20% of the floor price. Most Indian IPOs set a tight 3–5% band, signalling confidence in where the market will clear.
Why it matters for unlisted shares
The price band is the first public pricing signal for a company you may already hold. If the band is above your pre-IPO entry price, your paper gain is confirmed. If it is below, you must decide whether to hold through listing for a potential recovery or consider other options.
The band also anchors the GMP — grey-market traders quote premiums over the upper end of the band once it is announced.
Example: A pre-IPO investor bought at ₹320; the RHP set a ₹380–₹400 band — confirming an 18–25% paper gain before listing day.