A DRHP — Draft Red Herring Prospectus — is the first public document in an Indian IPO. The company files it with SEBI through its merchant bankers, disclosing the business, financials, risk factors, and planned use of proceeds, but not the price band or issue dates. SEBI reviews it; public comments run 21 days from the filing's public announcement.
| Document name | Draft Red Herring Prospectus (DRHP) |
|---|---|
| Who files | The issuing company, through its lead merchant bankers |
| Filed with | SEBI, plus NSE and BSE for in-principle listing approval |
| Public comments | 21 days from the public announcement of the filing |
| What it lacks | Price band, issue dates, final issue size |
| Where to find it | sebi.gov.in (public issues), exchange and lead-manager websites |
What’s in a DRHP?
A DRHP is the deepest look investors ever get at a private company. SEBI’s ICDR Regulations prescribe the contents: audited financials, the business model and competitive landscape, risk factors, litigation, promoter background and shareholding, related-party transactions, and what the company intends to do with the money.
Two sections reward close reading. Risk factors is where lawyers force the company to say what could go wrong: customer concentration, pending tax disputes, promoter share pledges. Objects of the issue tells you whether proceeds fund growth or simply let early investors exit through an offer for sale.
DRHP vs RHP vs final prospectus
The three documents are stages of the same filing. The DRHP starts SEBI’s review and a 21-day public comment window that runs from the public announcement of the filing. Once observations are resolved, the company files the Red Herring Prospectus with the Registrar of Companies — now carrying the price band and issue dates. After the issue closes and the price is fixed, the final prospectus records the actual numbers.
What happens after a DRHP is filed?
SEBI issues observations: clarifications and disclosure changes the company must address. The exchanges grant in-principle listing approval in parallel. Observations are valid for twelve months: the company can launch any time within that window, which is why a DRHP filed in a weak market often sits until sentiment improves, and why some never become IPOs at all.
How investors use a DRHP
By the time an IPO opens, the price band anchors every conversation. The DRHP is the one window where the business can be judged without a price attached. Reading the draft early — particularly risks, related-party transactions, and the offer-for-sale split — is how analysts form a view before the marketing machine starts. Live filings from this pipeline appear in our IPO and capital-markets digests.
Frequently asked questions
What is the difference between a DRHP and an RHP?
The DRHP is the draft filed for SEBI review; the Red Herring Prospectus is the version filed with the Registrar of Companies once observations are resolved. The RHP adds what the draft deliberately omits — the price band, the issue dates, and near-final deal size — and is the document investors actually subscribe against.
Does filing a DRHP mean the IPO will definitely happen?
No. SEBI's observations are valid for twelve months, and companies routinely let them lapse when markets turn. A DRHP is a statement of intent and a regulatory checkpoint, not a commitment to list.
Can a DRHP change after it is filed?
Yes. Companies respond to SEBI's observations and to material developments by filing updates or an addendum, and in some cases refile the draft entirely. The version that matters for subscription is the RHP.
What is the confidential pre-filing route?
Since 2022, SEBI allows companies to pre-file a draft confidentially, keeping commercially sensitive details out of public view while the regulator does its first review. The document becomes public later in the process, closer to the actual launch. The route also stretches SEBI's observation validity from twelve months to eighteen.
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