What is a DRHP and an RHP?
The DRHP is a company's draft filing with SEBI; the RHP is the final version carrying the price band. Both are public and free.
DRHP — the draft
A Draft Red Herring Prospectus is the document a company files with SEBI when it first proposes to go public. It sets out the business, its financials, the risks, what the company intends to do with the money, and who is selling shares.
It is called a 'red herring' because it deliberately omits the final price and exact share count — those are settled later. SEBI reviews the draft and issues observations the company must address.
DRHPs are public from the moment they are filed. You can read them free on SEBI's website, and on the exchanges' and merchant bankers' sites.
RHP — the final version
The Red Herring Prospectus is the updated document filed after SEBI's observations are incorporated. This is the one that carries the price band, the issue dates, the lot size, and the final structure of the offer.
If you only read one document before applying, read the RHP — it reflects the offer you are actually being asked to subscribe to.
What to actually read
These documents run to hundreds of pages, and most of it is boilerplate. A few sections carry disproportionate information.
Risk factors — companies are required to disclose what could go wrong, and they are specific. Pending litigation, customer concentration, regulatory dependencies and promoter disputes all appear here.
Objects of the issue — what the money is for. There is a meaningful difference between raising capital to build capacity and an offer that is largely existing shareholders selling out.
Offer for sale versus fresh issue — in a fresh issue the money goes to the company. In an offer for sale it goes to the selling shareholders. Many IPOs are a mix, and the ratio tells you who benefits.
Financial statements and restated accounts — look at revenue and margin trends across the years shown, not just the most recent one.
Common questions
Where can I read a DRHP for free?
On SEBI's website under public issue filings, and on the NSE and BSE websites. They are public documents and no payment or registration is required.
Does filing a DRHP mean the IPO is definitely happening?
No. A DRHP is a proposal. SEBI may issue observations requiring changes, and companies routinely delay or withdraw issues after filing, often because market conditions changed.
What is the difference between DRHP and RHP?
The DRHP is the draft filed for SEBI's review and omits the final price. The RHP is the final version filed after SEBI's observations, and it contains the price band, issue dates and lot size.
Keep reading
- What is GMP (Grey Market Premium)?
GMP is an unofficial price quoted in an informal market before a share lists. It is widely watched, entirely unregulated, and frequently wrong.
- How IPO allotment works
When an IPO is oversubscribed, retail allotment becomes a lottery for one lot each. Applying for more does not improve your odds.
- How to apply for an IPO in India
You need a demat account and either a bank ASBA facility or a UPI ID. Money is blocked, not debited, until allotment.