What is DRHP?

When a company plans to raise money (for example: float an IPO) from the public by selling its shares to investors, it files and submits a Draft Red Herring Prospectus (DRHP), also known as 'offer document' or 'preliminary registration document', with the market regulator Sebi (Securities and Exchange Board of India).

 

DRHP, a legal preliminary prospectus, serves as a crucial communication link between the company and its investors and stakeholders.

 

Key features

 

Through DRHP, the issuer firm allows potential investors to make an informed decision and analyse its financials, issuance objectives, business operations, promoter holding, market valuation, and other important information.
 

The DRHP