The method of price discovery (Finding the prices of the equity shares of the Company), is called book building. The optimum prices of the shares of the Company have to be fixed through a process known as book building.
A price range known as a price band is decided by the Company. It has a lower limit and an upper limit .The lower price (The shares will not be offered at a price lower than this), is called the floor price.
The upper price (The upper limit of the pricing of the shares), is called the ceiling price. Shares of the Company are offered within the price band.
You can bid only between the floor price and the ceiling price. The issue is then closed for subscription. The cut off price is then decided by the Company issuing the shares and the lead manager to the issue, based on the interest and the appetite of the investors to the equity (share) issue by the Company.
All investors who have submitted bids at and above the cut off price, are able to procure the shares of the Company. If you are a retail investor, then you can also apply at the cut off price (you are ready to purchase at the price decided by the Company and the lead manager to the issue).
If you have applied at the ceiling price and the cut off price is less than the ceiling price, then the excess money is refunded to your account.