Why companies go for less than 7 days bidding (i.e. 3, 4 days generally), When maximum number of days for which IPO bid should remain open is 7 (and minimum is 3)?

Book-built IPOs have a minimum and maximum period of bidding that is 3-7 working days. This can be extended by 3 days if the price band is changed.

The majority of companies prefer 3 days. The following are some factors to consider when choosing minimum bidding days:

• If a company needs to extend the bidding period, they can do so for three more days.
• The IPO costs for Issuer Company can be reduced by shortening their bidding process (i.e.cost for advertisement campaign , extra staff cost etc). A shorter period of IPO reduces costs for registrars, lead managers, syndicate managers, stock exchanges and PR agencies, as well as other parties involved in the IPO process.
• It reduces oversubscription and thus lowers the cost of processing applications.
• A short bidding process can also result in early listing of IPO shares.