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Quick AnswerA Red Herring Prospectus (RHP) or Draft Red Herring Prospectus (DRHP) is a preliminary registration document filed by a company with SEBI before its IPO. It contains critical information about the company's business operations, financials, promoters, and objectives, but lacks details on the issue price or quantity of shares.
Before a company can raise money from the public, it must file an offer document with the Securities and Exchange Board of India (SEBI). This document is known as the Draft Red Herring Prospectus (DRHP).
The term 'red herring' comes from a disclaimer printed in red ink on the document, stating that the information is not complete and may be subject to change. Specifically, it does not state the final price of the shares or the exact number of shares being offered.
When analyzing a DRHP, investors should pay close attention to:
You can download the DRHP from the official SEBI website, the stock exchanges (BSE/NSE), or the lead manager's website.
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