The initial months of 2010 witnessed a new method, called the French Auction, being used for the pricing of subsequent share issues of several public sector undertakings. This was admittedly brought about with a view to maximizing the divestment proceeds of the undertakings. The method was used in place of the book building method, where the issuer would specify a price band and allocate shares at a specific price within that band, depending on the demand. While competitive bidding in the absence of a price band under the French Auction system is expected to result in a more accurate valuation of the IPO and greater capitalization for the issuer, we point out its shortcomings, which make it unfit for implementation in the Indian markets, as the IPO price is prone to manipulation and argue that it may not result in more accurate pricing than the book building method.