What does book making in an IPO mean?

When the shares of a company are offered to the public for
the first time, the underwriter has to determine a price based on the assets of the
company and the expected future earnings, at which it would be able to sell the shares
of the company to the public.

Instead of choosing a fixed
price, this is usually done by choosing a band, within which offers are considered if
they are made. Depending on the number of applications received at each price, the
underwriter can determine the highest price at which it is possible to sell all the
shares it intends to. This is called the book building process. It allows the shares of
the company to be sold at the best price possible depending on the interest shown by the
prospective investors and help the company garner the most
funds.