What Is a DRHP and RHP? IPO Prospectus Explained
When an Indian company wants to go public, it files a detailed prospectus with SEBI. The DRHP — Draft Red Herring Prospectus — is the first draft submitted for SEBI's review. After SEBI's observations are addressed, the company files the RHP — the final Red Herring Prospectus — just before the issue opens.
What's inside a DRHP/RHP
- The company's business, strengths, and risk factors.
- Audited financial statements for the last few years.
- What the IPO money will be used for (the 'objects of the issue').
- Promoter and shareholder details, and the offer structure (fresh issue vs offer-for-sale).
Why 'red herring'?
It's called a red herring prospectus because it does not yet contain the final price or exact number of shares — those are fixed only when the price band and issue size are announced. The DRHP is the draft; the RHP is the near-final version circulated to investors.
How to read it before applying
Focus on the risk factors, how profitable the company actually is, whether the IPO is a fresh issue (money goes to the company) or an offer-for-sale (money goes to existing shareholders), and the valuation implied by the price band. Once the company lists, you can track its quarterly results and shareholding through the API. See also our guide to what an IPO is.