What is a DRHP? The IPO draft prospectus
What is a DRHP? A DRHP, or draft red herring prospectus, is the preliminary offer document a company files with SEBI, through its merchant bankers, before launching an IPO. It sets out the business, the financials, the risk factors, and where the money raised will go. What it does not carry is the final issue price or size, which is why it is called a "red herring." It runs under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
Definition
A DRHP (draft red herring prospectus)
is the preliminary offer document a company files with SEBI before an IPO, through its merchant bankers. It describes the business, financials, risks, and use of proceeds, but not the final price or issue size. SEBI reviews it and issues observations. Source: SEBI ICDR Regulations, 2018.
What does a DRHP contain?
A DRHP is meant to give an investor the facts needed to assess the company. Its core sections are the risk factors, the objects of the issue (where the proceeds go), the audited financials, the promoter and shareholding details, related party transactions, outstanding litigation, and the basis for the issue price. Because it names promoters and pre-issue holders, it ties directly to the shareholding pattern the company will report once listed.
What happens after a DRHP is filed?
Filing a DRHP starts SEBI's review; it is not an approval. SEBI examines the document and issues observations that the company must address. The DRHP is also made public for comment.
21 days
Minimum period a DRHP is public for comments before SEBI finalises its observations
Source: SEBI ICDR Regulations, 2018
The DRHP is published on the SEBI, stock exchange, and merchant banker websites for at least 21 days, during which the public can send comments to SEBI. After SEBI issues its observations, the company files a red herring prospectus, or RHP, with the Registrar of Companies, and this RHP carries the price band used for the actual offer.
DRHP vs RHP: the difference in one line
A DRHP is the draft SEBI reviews; an RHP is the near-final document, filed after SEBI's observations, that carries the price band and opens the issue. Both sit within the same IPO disclosure chain that also includes the anchor investor allocation disclosed just before the issue opens. Learn how to read a DRHP section by section next. Flock reads these public disclosures and keeps each one dated and sourced. What any IPO means for your own decision is your call to make.
Frequently asked questions
What is a DRHP?
A DRHP, or draft red herring prospectus, is the preliminary offer document a company files with SEBI through its merchant bankers before an IPO. It describes the business, financials, risks, and use of proceeds, but not the final issue price or size. Source: SEBI ICDR Regulations, 2018.
What is the difference between a DRHP and an RHP?
A DRHP is the draft filed with SEBI for review. After SEBI issues its observations, the company files a red herring prospectus, or RHP, with the Registrar of Companies. The RHP carries the price band and is the document used for the actual offer. Source: SEBI.
How long is a DRHP open for public comment?
A DRHP is made public on the SEBI, stock exchange, and merchant banker websites for at least 21 days so that the public can send comments to SEBI before it finalises its observations. Source: SEBI ICDR Regulations, 2018.
Does a DRHP mean SEBI has approved the IPO?
No. Filing a DRHP starts SEBI's review; it is not an approval or an endorsement of the issue. SEBI issues observations that the company must address, and SEBI does not vouch for the accuracy of the document or the merits of the offer. Source: SEBI.
Flock tracks these filings, sourced, dated, and linked back to the original. See what smart-money entities disclosed, without the guesswork about what it means.
Disclosures shown are public regulatory filings. Data may be delayed or incomplete. Smart-money entities may no longer hold positions shown. Not investment advice.