Definiton
Initial Public Offering refers to the selling of shares by a private company to the public for the first time. Initial Public Offering is a source of funds raised from the primary market. All subsequent public offerings are known as Follow-on Public Offerings or Secondary Market Offerings.

Book Building
Book building is a process of price discovery used in Initial Public Offering. As per SEBI guidelines, Book Building is defined as "a process undertaken by which a demand for the securities proposed to be issued by a body corporate is elicited and built-up and the price for such securities is assessed for the determination of the quantum of such securities to be issued by means of a notice, circular, advertisement, document or information memoranda or offer document". Investors bid at different prices which may be equal to or more than the floor price and the issue price of shares is determined at the end of the bidding period.

Book Building Issue vis-a-vis Fixed Price Issue
In a book building issue, there is a price band where in the lower price is the floor price and the higher price is the ceiling price. Investors may bid at the floor price or higher than the floor price. And based upon this process the issue is price is determined. Whereas in fixed price issue, there is no price band and therefore investors have to apply at only one price. In a Book Building issue, the demand can be seen on a daily basis as the bids are recieved and the book is built, whereas, in a Fixed Price issue, demand can be ascertained only at the close of the issue.