The issuer company along with the lead managers decides the price or price band of the company’s IPO. The regulatory authorities such as SEBI or stock exchanges have no role to play in deciding the price of an IPO.
These authorities are important in validating the content and information of the IPO prospectus. After doing significant market research and roadshows, the company and the lead managers decide the appropriate price band for the IPO.
Companies generally deal with the huge risk of IPO failure while asking for a higher premium. Many Times the investors do not like the issuer company or the price band of its IPO and don’t apply for it which results in under-subscribed or unsubscribe issue. In such cases the companies’ either suspend the IPO or revises the issue price.