What is offer document in IPO?

An offer document in an IPO is a formal document prepared by a company planning to raise capital by offering its shares to the public for the first time. Also known as a prospectus, it is filed with regulatory authorities such as the Securities and Exchange Board of India (SEBI) in India.

The offer document provides essential information about the company, including its business model, financial statements, management team, risk factors, and IPO objectives. It helps potential investors make informed decisions before purchasing shares.

In India, IPO offer documents are categorized into three types:

1. Draft Red Herring Prospectus (DRHP): The initial version submitted to SEBI for review, allowing for feedback and modifications.
2. Red Herring Prospectus (RHP): The final version before the IPO launch, with updated financials but excluding the offer price and share allocation details.
3. Prospectus: The final document containing all details, including the IPO price, issue size, and allotment structure.

The offer document is an important document for investors, providing transparency and insights into the company's financial health and future prospects.