- The DRHP is the first detailed offer document a company files when it plans an IPO in India.
- It discloses the business, risks, financials, management, capital structure, objects of the issue and legal matters.
- The final price is not in the DRHP. It comes later through the RHP and the final prospectus.
What is a DRHP?
A Draft Red Herring Prospectus (DRHP) is the preliminary offer document a company prepares when it plans an initial public offering (IPO) in India. It is filed with the Securities and Exchange Board of India (SEBI) for main-board issues, or with the stock exchange's SME platform for SME issues. It tells regulators and future investors, in detail, what the company does, how it has performed, what risks it faces and how it will use the money raised.
The disclosure requirements are set mainly by the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, commonly called the ICDR Regulations.
What goes into a DRHP?
- Risk factors: internal and external risks that could affect the business or the issue, generally presented in order of materiality.
- Industry and business overview: the market, the company's products, customers, competition and strategy.
- Financial information: restated financial statements and key performance indicators.
- Management and promoters: the board, key managerial personnel, promoters and their interests.
- Capital structure: shareholding history, pre- and post-issue structure and lock-in details.
- Objects of the issue: exactly how the proceeds will be used.
- Legal and regulatory matters: outstanding litigation, approvals and material contracts.
Who prepares it?
A DRHP is a team effort. The merchant banker (book-running lead manager) leads the process, working with legal counsel, the statutory and peer-reviewed auditors, the company secretary, the registrar and, above all, the company's own management. The promoters and directors are responsible for the accuracy of what it says, which is why founders should be closely involved rather than treat it as a black box.
DRHP vs. RHP vs. prospectus
- DRHP: the draft filed for review. It does not include the price or final issue size.
- RHP (Red Herring Prospectus): the updated document filed before the issue opens, reflecting regulatory observations. It still does not include the final price.
- Prospectus: the final document after price discovery, with the issue price and size.
How long does it take?
Preparing a DRHP typically takes several months. Most of that time goes to getting the company ready: cleaning up records, restating financials, strengthening governance and collecting documents. The drafting itself is the visible tip of a much larger readiness effort, which we cover in The SME IPO readiness checklist.
Common pitfalls
- Generic risk factors that don't reflect the company's real situation
- Inconsistencies between the business narrative and the financial statements
- Missing approvals, licences or corporate records discovered late
- Unclear or vague objects of the issue
- Slow turnaround on observations because documents are scattered
How software helps
IPO Labs AI provides a collaborative DRHP Workspace with tracked changes, comments, SEBI observation tracking and Word export. It works alongside a Document Vault that tracks mandated documents by status, and Oracle {IPO.GPT}, an AI tutor that explains DRHP sections and SEBI rules in plain language. Read more in How AI is changing IPO preparation in India.
This guide is general information, not legal or investment advice. Work with qualified advisors on your IPO.
Frequently asked questions
What does DRHP stand for?
DRHP stands for Draft Red Herring Prospectus, the preliminary offer document a company files when it plans an initial public offering in India.
Where is a DRHP filed?
For main-board IPOs the DRHP is filed with SEBI. For SME IPOs, the draft offer document is filed with the SME platform of the stock exchange, such as NSE Emerge or BSE SME.
What is the difference between a DRHP and an RHP?
The DRHP is the draft filed for review. The RHP is the updated version filed before the issue opens. Neither contains the final issue price, which appears in the final prospectus after price discovery.
See how NovaVente can help with this in practice.
