What is a BRLM (Book Running Lead Manager)?

When you explore the process of taking a company public, you will encounter several specialised roles that guide the transition from private to public status. Among them, the Book Running Lead Manager (BRLM) plays a central part in shaping the public offer, assessing market conditions, and ensuring that the issue is handled with clarity and structure. You interact with multiple stakeholders during an Initial Public Offering (IPO), and the BRLM becomes your primary link between the company, market participants, and regulatory authorities. By understanding how it operates, you gain clearer insight into the steps that influence price discovery, investor communication, and overall execution of the offering.

What is a BRLM (Book Running Lead Manager)?

A Book Running Lead Manager is a merchant bank or investment bank appointed by a company planning to launch an IPO or other public issue. The primary role of a BRLM is to guide the entire public issue process from inception to listing, managing documentation, compliance, pricing, investor outreach, demand assessment, share allocation, and coordination with regulators and intermediaries.

In simpler words, when a private company decides to go public, it engages a BRLM to manage all critical steps, especially when the issue is being conducted through the book-building route. It helps ensure that the issue is structured properly, priced fairly, compliant with regulatory norms, and distributed efficiently to investors.

Since it plays such a central role, many companies rely heavily on its expertise, network and reputation to ensure a smooth IPO process.

Functions of BRLM

Below are the key functions of BRLM that will assist you in understanding the concept more clearly: 

• Price Discovery via Book Building

The BRLM determines the issue price through book building, which means collecting bids from investors within a price band, gauging demand at various price levels, and recommending a final issue price
 

• Regulatory and Compliance Coordination

It prepares and submits the necessary offer documents, such as the Draft Red Herring Prospectus (DRHP), ensures compliance with regulatory norms, liaises with the market regulator and the stock exchange, and handles filings and statutory disclosures.

• Investor Outreach and Marketing

The BRLM markets the issue to potential investors, including institutional investors and retail investors. This involves roadshows, investor presentations, information dissemination, and awareness-building for the IPO.

• Share Allocation and Underwriting Coordination

Once demand is evaluated and the final price is determined, it coordinates the allocation of shares across various investor categories, such as institutional and retail investors, in partnership with registrars and underwriters. When required, it also provides underwriting support to address any subscription shortfall.
 

• Liaison with Other Intermediaries

The BRLM coordinates with registrars, stock exchanges, depositories, legal advisors, bankers, underwriters and syndicate members to ensure smooth execution of the IPO.

 

• Post-Issue Support and Compliance

After allotment and listing, the BRLM may assist in final listing formalities, investor communications, stabilisation (if required), and compliance with post-issue reporting or regulatory obligations.

Responsibilities of BRLM

Now that you have understood BRLM's functions, delving deeper into its responsibilities is another significant step. Below are the same: 

• Structuring the IPO 

This involves defining the overall structure of the public issue, including the issue size, number of shares, price band, investor categories, and timing. It requires close coordination with the company’s management and financial advisers to ensure that the offering is strategically planned and aligned with market conditions.

• Preparing Offer Documents 

All statutory documents, such as the Draft Red Herring Prospectus (DRHP), Red Herring Prospectus (RHP), and final Prospectus, are drafted with detailed disclosures. These include the company’s business model, financial statements, risks, objectives of the issue, shareholding pattern, and all material information required for investor understanding and regulatory compliance.

• Conducting Due Diligence 

A thorough review of the issuer’s financial records, operations, legal matters, management capability, and business strategy is carried out. The objective is to ensure accuracy, transparency, and completeness of all disclosures while minimising the risk of misstatements or omissions.

• Managing the Book-building Process 

This includes inviting bids from various types of investors, collecting and analysing demand data, tracking subscription levels, and recommending the final issue price. The process ensures fair price discovery and reflects the true market appetite for the company’s shares.

• Marketing and Investor Communication

Roadshows, presentations, and meetings are organised to communicate the company’s strengths, business prospects, and risks to potential investors. This outreach covers institutional buyers, retail investors, and other market participants to generate informed interest in the issue.

• Co-ordination with Underwriters, Syndicate Members, and Registrars

Key intermediaries work together to ensure a smooth issue process. Underwriters provide subscription assurance where required, registrars manage application processing and allotment, while syndicate members support distribution and underwriting activities.

• Share Allotment and Listing Support

After finalising the issue price, shares are allocated across investor categories. Refunds (if any) are processed, shares are credited to investors’ demat accounts, and all procedural requirements for listing on the stock exchanges are completed.

• Post-Issue Compliance and Grievance Handling

The responsibilities continue even after listing. This includes fulfilling post-issue regulatory obligations, facilitating communication with investors, ensuring smooth refunds or clarifications, and addressing any complaints or queries raised by investors or regulators.

Importance of BRLM in IPO

Several factors define the importance of BRLM in the IPO. Below are some of them: 

• Efficient and Fair Price Discovery

Through the book-building process managed by the BRLM, the company can find an issue price that reflects real market demand and investor sentiment. This helps avoid over- or under-pricing.

• Regulatory Compliance and Credibility

A SEBI-registered BRLM ensures compliance with all regulatory and disclosure norms, thereby safeguarding investor interests and reducing legal and compliance risks. 

• Access to Investor Network

Established BRLMs often have extensive relationships with institutional investors, high-net-worth individuals, and retail investors. This aids in reaching a broad and diversified investor base, improving the chances of full subscription.

• Professional Management and Reduced Risk

By handling due diligence, documentation, valuation, marketing, underwriting and allocation, BRLMs reduce the operational burden on the issuing company and help manage risks associated with IPO execution.

• Market Confidence and Reputation

A credible BRLM adds weight to the issue, signalling to investors that the IPO has undergone rigorous scrutiny and is being managed by experienced professionals, thereby boosting investor confidence.

How Companies Select a Book Running Lead Manager?

Choosing the right BRLM is a decision that firms make after considering several factors. Common criteria include:

• Past IPO Experience and Track Record

Companies prefer BRLMs that have successfully managed previous IPOs, preferably in similar sectors or comparable size, because their expertise reduces uncertainty.

• Market Knowledge and Investor Access

With a strong investor network, including institutional, retail, and high-net-worth investors, it can help secure better subscription terms and wider distribution, which are critical to the IPO’s success.

• Regulatory Credentials

It must be a SEBI-registered merchant banker that meets all regulatory criteria, including net worth, professional infrastructure, and compliance systems, to be eligible to manage public issues. 

• Fee Structure and Cost/Benefit Considerations

Companies examine the fees quoted by prospective BRLMs and balance costs against expected benefits, including marketing reach, investor access, and efficient execution.

• Reputation and Credibility

A reputed Book Running Lead Manager lends credibility to the IPO. A well-known name may help build investor trust and drive better subscription growth.

SEBI’s Role in Overseeing BRLMs

As the capital market regulator, SEBI plays a crucial role in ensuring that Book Running Lead Managers operate with integrity, transparency, and accountability during public issues. Its oversight ensures that investors receive accurate information, the IPO process remains fair, and the interests of all market participants are protected. Here is a detailed overview of SEBI’s role in BRLM: 

• Regulation and Eligibility Requirements

  
  SEBI lays down strict eligibility criteria for merchant bankers seeking to act as BRLMs. This includes capital adequacy, professional experience, infrastructure standards, and a proven track record.

• Approval and Registration

  
  Before functioning as a BRLM, the merchant banker must obtain SEBI registration. SEBI reviews their credentials, compliance history, and operational capabilities to ensure they can responsibly manage public issues.

• Monitoring Due Diligence Quality

  
  SEBI ensures that BRLMs conduct thorough and accurate due diligence. It checks whether the disclosures in the prospectus are complete, factual, and consistent with regulatory requirements to protect investor interests.

• Oversight of Book-Building and Pricing

  
  SEBI monitors how BRLMs manage the book-building process, assess demand, and recommend pricing. It ensures that price discovery remains fair, transparent, and free from manipulation.

• Ensuring Compliance With Issue Process

  
  From drafting offer documents to listing, SEBI reviews every stage. It verifies timelines, disclosures, allotment procedures, and compliance with rules such as the ICDR Regulations.

• Inspection and Audits

  
  SEBI conducts periodic inspections of BRLMs to assess their compliance with the prescribed norms. Non-compliance can lead to warnings, penalties, or suspension of the licence.

• Investor Protection and Grievance Redressal

  
  SEBI ensures that BRLMs prioritise investor protection and respond promptly to complaints. It also intervenes if any irregularity is reported during or after the IPO process.

• Accountability and Penalties

  
  If a BRLM is found guilty of negligence, conflict of interest, or unfair practices, SEBI can impose fines, restrict operations, or cancel registration, ensuring strong accountability.

BRLM vs. Lead Manager

In an IPO, multiple intermediaries work together to manage the issue, but two roles often cause confusion: BRLMs and Lead Managers. While both are merchant bankers responsible for guiding the public issue, their responsibilities are not identical. The table below highlights the key differences to help you clearly understand how each role functions.

Key Terms Related to Book Running Lead Manager

To better understand the role of a BRLM, there are some important terms typically used in the context of IPOs and book-building that you should be aware of: 

• Price Band - The range of prices (floor to cap) within which investors can place bids during the book-building process.
  
   
• Draft Red Herring Prospectus (DRHP) - A preliminary offer document prepared by the company with the help of BRLM, containing details about business, financials, risk factors, but not the final issue price.
  
   
• Red Herring Prospectus (RHP) - The final prospectus filed before the IPO opens, including final issue size, price band, and other necessary disclosures.
  
   
• Cut-off Price - The final price at which shares are allotted to successful bidders, determined after evaluating demand across the price band.
  
   
• Underwriting - The commitment by underwriters to subscribe to any unsubscribed shares in an IPO; ensures minimum capital raise for the issuer.
  
   
• Book Building - The process of soliciting bids from investors, collecting demand data within the price band, and determining the final issue price based on demand
  
   
• Syndicate / Syndicate Members - A Group of underwriters and other financial institutions working together under the lead manager to manage distribution, underwriting, and allotment functions.

Benefits of Engaging a Book Running Lead Manager

For a company preparing to launch an IPO, partnering with a skilled BRLM provides significant advantages:

• Professional management of the IPO process - From due diligence and documentation to regulatory filings, marketing, and share allocation, it ensures that each step is handled methodically.
   
• Transparent and fair price discovery - Through the book-building process, bids are collected from a wide investor base, helping determine a fair, market-based issue price.
   
• Access to a wide investor network - A reputable BRLM brings connections across institutional investors, HNIs and retail segments, increasing the likelihood of full subscription.
   
• Reduced regulatory risk - As a SEBI-registered entity with experience, the BRLM ensures compliance with regulatory norms, reducing the risk of procedural lapses or regulatory issues.
   
• Credibility and investor confidence - A well-known BRLM lends credibility to the issue, helping investors trust that disclosures and valuation have been handled professionally.
   
• Better allocation and distribution - Through structured syndicate coordination and underwriting support, it ensures smoother allotment and distribution, even in large or complex issues.
   
• Post-issue support and compliance - From listing facilitation to investor grievance handling, a BRLM helps ensure a smooth transition from IPO to public listing.

Conclusion

A Book Running Lead Manager plays a central and indispensable role in executing an IPO, especially under the book-building route. As the key intermediary between the issuing company, investors, regulators and other intermediaries, it ensures that the IPO is structured correctly, priced fairly, remains compliant with regulations, and reaches the right set of investors.

For companies, selecting the right and skilled BRLM means entrusting a critical part of their public-market debut to professional management, market credibility, risk mitigation, and efficient capital raising. For investors, the involvement of a credible BRLM enhances transparency, confidence and fairness in the offering.

In short, whenever you see an IPO being planned or launched via book-building, the presence of a competent BRLM is foundational to both the issuer’s and investors’ interests.