IPOIntermediate
DRHP
Draft Red Herring Prospectus
The draft offer document a company files with SEBI before an IPO.
Detailed explanation
The DRHP carries the business description, audited financials, promoter details, litigation, risk factors and intended use of proceeds — everything except the final price band and issue size. SEBI reviews it and issues observations before the final RHP can be filed.
Example
The 'Objects of the Offer' section reveals whether money funds growth or merely repays existing debt — a meaningful difference.
Why it matters
It is the only comprehensive, legally accountable source of information about a company going public.
Key points
- Risk factors are ordered by the company, not by severity.
- Related-party transactions deserve close reading.
- SEBI observations are not an endorsement of the issue.
Related terms
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Educational content only. Definitions and examples are illustrative and are not investment, tax or legal advice.