Definition of Lead Underwriter

A Lead Underwriter is in charge of organizing the distribution of member participation shares, syndicate and making stabilized transactions. The name of the lead underwriter is mentioned on the left side of the prospectus cover.

The person majorly works with various other investment banks in order to establish an underwriter syndicate, and will also create the force for initial sales of the shares. These shares are further sold to the retail clients and institutions.

Points to remember:

• This can bring a bigger payday if the market reflects higher demand regarding the shares.
• Generally, the issuer of stocks will permit the lead underwriter to make an over-allotment of shares only if the demand is high. It can also bring more benefits in terms of money to the underwriting firm.
• The lead underwriter also has access to financials of the company and conditions of the current market, to achieve the initial number and value of the shares which are to be sold.