What is DRHP in IPO? DRHP Explained

 

In recent times, more and more IPOs have been coming into the Indian stock markets and this simply means that a large number of investors have been vying to invest in IPOs. If you are searching for an upcoming IPO in India, it becomes more than necessary to have proper knowledge about various technical terms involved in such a scenario. Understanding of DRHP in IPO is necessary because this would help you serve the purpose of making long-term and short-term gains and not having such information could make you lose your investment.

What is DRHP (Draft Red Herring Prospectus)?

DRHP stands for Draft Red Herring Prospectus. It plays a pivotal role in helping investors gain truthful insights about investing in a specific company’s IPO. It is maintained as a document that needs to be filed by companies as stated by DRHP. The next step is that SEBI reviews this DRHP document and makes sure that the company has made all necessary disclosures.

It should be kept in mind that the document is a kind of draft which SEBI has made it mandatory for companies to make all-important revelations. The purpose of this step is to help investors know all the necessary information about the company they are looking to invest in.

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