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DRHP: Draft Red Herring Prospectus
The full form of DRHP is “Draft Red Herring Prospectus”. It is a document that is prepared to introduce a new business or product to a potential investor. The DRHP is a document that is used as a loose framework for the initial stages of the IPO process. The document clarifies the reason why the company wants to raise money from the public, how the money will be used and risks involved in investing in the company. DRHP document is very useful to investors because it provides detailed information about the company’s business operations, financials, promoters and the company’s objective for raising funds by filing an IPOs. It should be noted that the DRHP does not contain information on the price or size of the offering.
Frequently Asked Questions (FAQ)
Open the SEBI website – https://www.sebi.gov.in/
On the ‘What’s New’ segment, click on ‘View All’
Since LIC DRHP was filed on February 16, it’ll show up right at the top currently.
Draft offer document is an offer document filed with SEBI for specifying changes, if any, in it, before it is filed with the Registrar of companies (ROCs).
Red herring prospectus is an offer document used in case of a book built public issue. It contains all the relevant details except that of price or number of shares being offered. It is filed with ROC before the issue opens.
When a private company first sells shares of stock to the public, this process is known as an initial public offering (IPO).