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Every IPO news story mentions a DRHP or RHP at some point — "Company X files DRHP with SEBI" or "RHP reveals price band of ₹450–₹475." These two documents are the most important paperwork behind any IPO, yet most retail investors never open one before applying.
This guide explains what a DRHP and RHP actually are, how they differ from each other, what sections are worth your time, and where you can download them for free.
What is a DRHP (Draft Red Herring Prospectus)?
The DRHP is the first formal document a company files with SEBI when it plans to go public. It's a detailed disclosure of the business — covering the company's operations, industry, promoters, financial statements, risk factors, and how it intends to use the money it raises.
Crucially, a DRHP does not contain a price band or exact issue dates, because those details are decided much closer to the actual listing. Once filed, SEBI reviews the DRHP and may raise clarifications; the document is also published publicly so investors, analysts, and the media can review it before the IPO opens.
What is an RHP (Red Herring Prospectus)?
The RHP is the updated version of the DRHP, filed with SEBI and the Registrar of Companies a few days before the IPO actually opens for subscription. It carries all the same core information as the DRHP, but with the missing pieces filled in — the price band, the issue size, and the exact subscription dates.
The one thing an RHP still doesn't have is the final, fixed issue price — that's only confirmed after the book-building process closes and is published in the final Prospectus, filed after the issue is fully subscribed.
DRHP vs RHP vs Final Prospectus — Quick Comparison
| Document | When It's Filed | Price Band Included? | Final Price Included? |
|---|---|---|---|
| DRHP | Months before the IPO opens | No | No |
| RHP | Few days before the IPO opens | Yes | No |
| Prospectus | After the issue closes, before listing | Yes | Yes |
Why Do Companies File a Draft First?
Filing a DRHP before the final RHP gives SEBI and the public an observation window. SEBI can raise clarifications or ask for additional disclosures, and the general public — including analysts and financial media — gets time to review the company's claims before it actually starts raising money. This structure exists to protect investors from companies rushing to market without adequate scrutiny.
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The RHP contains the same disclosures as the DRHP, with the price band and dates added
What's Inside an RHP — Key Sections to Know
An RHP typically runs several hundred pages, but a handful of sections carry most of the useful information for a retail applicant:
- Risk Factors — a candid list of everything that could go wrong with the business, from litigation to industry-specific risks. Often the most revealing section in the whole document.
- Objects of the Issue — exactly what the company plans to do with the money raised (debt repayment, expansion, working capital, or an Offer for Sale where existing shareholders simply cash out).
- Business Overview & Industry Outlook — what the company actually does, its market position, and competitive landscape.
- Financial Statements — revenue, profit, debt, and key ratios over the last three to five years.
- Promoter & Management Details — who runs the company and their shareholding, useful for judging skin in the game.
- Litigation & Regulatory Actions — any pending legal cases against the company or its promoters.
- Capital Structure — pre- and post-issue shareholding pattern, and any pre-IPO placements.
How to Read an RHP — A Practical Approach
Start with Risk Factors
This section alone gives you an honest, SEBI-mandated list of everything that could hurt the business — read it before anything else.
Check the Objects of the Issue
An IPO that's mostly an Offer for Sale (existing shareholders exiting) tells a different story than one raising fresh capital for expansion.
Scan the Financial Summary
Look at revenue and profit trend over the last 3 years — consistent growth is a very different signal from a one-off spike right before the IPO.
Note the Price Band vs Peer Valuation
Once the RHP is out, compare the price band's implied P/E ratio against listed peers in the same sector.
Where to Find a Company's DRHP or RHP
DRHPs and RHPs are public filings. You can find them on SEBI's official website under the IPO filings section, on the NSE and BSE websites under their respective public issues pages, and on the issuing company's own website — usually under an "Investor Relations" or "IPO" section. Lead managers handling the issue also typically host a copy on their own site.
Frequently Asked Questions
