What is DRHP in IPO?

DRHP (Draft Red Herring Prospectus) is a preliminary document that a company files with the exchange when planning to launch an Initial Public Offering (IPO). It contains important information about the company's business, financial performance, and prospects, but not the offer price or the number of shares to be offered.

The DRHP obtains initial feedback from potential investors and assesses the company's fundamentals. Subsequently, the company publishes a Red Herring Prospectus (RHP) and the final prospectus with full offer details. SEBI requires companies to submit the DRHP for review and compliance.

Key Features of DRHP:

1. Contains Financial & Business Details – It includes information about the company’s business model, financial performance, risks, industry outlook, and how the IPO funds will be used.
2. Filed with SEBI for Approval – SEBI reviews the DRHP to ensure transparency and investor protection.
3. Does Not Include Issue Price – The DRHP does not mention the final price of the shares but may provide a price band.
4. Publicly Available for Feedback – Investors and stakeholders can review the document and provide feedback before the final Red Herring Prospectus (RHP) is filed.

Once SEBI and stock exchanges approve the DRHP, the company files the final RHP, which includes the IPO dates, issue price, and other confirmed details.