Draft Red Herring Prospectus (DRHP) has to be approved by the relevant stock exchange of India NSE Emerge or BSE SME for SME IPO. After approval of DRHP, UDRHP (Updated DRHP) and Red Herring Prospectus (RHP) filing is the next step towards listing requirements.
The relevant stock exchange conducts a thorough review of DRHP and the following steps are undertaken to file final prospectus (RHP) with stock exchanges.
Once all necessary modifications have been made, the Issuer company proceeds to file the Updated Draft Red Herring Prospectus (UDRHP) with the exchange. This version reflects all the amendments and updates requested by the exchange, ensuring that the prospectus is in full compliance with the applicable regulations. This filing serves as a final confirmation of the Issuer’s commitment to maintaining transparency and regulatory adherence. UDRHP approval typically takes two-three weeks by the Exchange.
The IPO merchant banker then submits final Prospectus, RHP (Red Herring Prospectus), a due diligence certificate as per Form A of Schedule V, along with additional confirmations as outlined in Form G of Schedule V to SEBI and to the ROC. These documents affirm that the Issuer has complied with all regulatory requirements and that the disclosures made in the offer document are accurate and sufficient. This due diligence process ensures that potential investors receive reliable and verified information before making investment decisions.
As per the regulatory requirements, the RHP is displayed on the websites of the Issuer company, the Securities and Exchange Board of India (SEBI), the lead manager(s), and the SME exchange(s). This ensures transparency and provides investors with easy access to crucial information about the IPO.
The transformation from DRHP to RHP is a structured and meticulous process designed to safeguard investor interests and maintain market integrity. By undergoing rigorous scrutiny and incorporating necessary revisions, the issuer company ensures that its offer document aligns with regulatory standards, thereby facilitating a smooth and compliant IPO launch.
After the filing of RHP, marketing and advertising activities begins which can be understood in the next chapter.
DRHP is a preliminary document filed by a company planning to launch an IPO. It provides important details about the company’s business, financials, and risks before the IPO is approved.
It takes a minimum 3 months for an IPO to open after filing of DRHP. The relevant stock exchanges take time to examine and approve the DRHP.
DRHPs are available on SEBI’s official website, as well as the websites of the stock exchanges (NSE, BSE) and the company’s lead managers. One may also refer ipoplatform.com for a particular company’s DRHP.
DRHP is a preliminary document whereas RHP is a final version which contains all disclosures and comments as addressed at the time of review of DRHP.
RHP is the final IPO document filed with SEBI and the Registrar of Companies (ROC) before IPO opens.
UDRHP is a revised version of the Draft Red Herring Prospectus (DRHP) that includes all changes that are required by the stock exchange on examination of DRHP.
They ensure that all disclosures and changed suggested by the stock exchange are duly incorporated and provide investors with accurate and updated information regarding SME IPO.
RHP is typically filed 3-5 days before the IPO opens.
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