In a book-built issue, the company does not fix one price in advance. It publishes a narrow range and collects bids from investors during the issue period.
Retail investors are allowed to select the cut-off option, which means they agree to accept whatever final price is decided within the band.
The amount blocked in your bank account is based on the upper end of the band. If the final price is lower, the difference is released back to you.
An easy example
If the price band is Rs 268 to Rs 282, you may bid anywhere in that range. Most retail investors bid at the upper end so that their application stays valid if the final price is set there.
Important note
The final issue price, called the cut-off price, is decided after the issue closes based on the demand received.
Common mistake
Bidding at the lower end to save money. If the final price is higher, the application may not be considered for allotment.