# DRHP vs RHP vs prospectus: the difference Source page: https://ipo24by7.com/learn/drhp-vs-rhp/ · Updated 2026-10-29 · By IPO24by7 Research The DRHP (draft red herring prospectus) is the first version of an IPO document, filed with SEBI or the stock exchange for review and public comments. The RHP (red herring prospectus) is the cleared version filed before bidding opens, complete except for the final price and issue size. The prospectus is filed after pricing and carries the final numbers. ## Key takeaways - DRHP is the draft for review; it can change, and many never become IPOs. - SEBI observations on a DRHP are valid for 12 months; the IPO must open within that time. - RHP is the final document before bidding; only the price and exact issue size are missing. - The prospectus adds the final price after bidding; fixed price issues file it directly. - Read the RHP before you apply; it has the latest numbers and risks. ## Three documents, three stages An IPO has three offer documents, one for each stage. The draft is for review, the RHP is for bidding, and the prospectus records the final terms. | Document | When it is filed | Filed with | What is missing | |---|---|---|---| | DRHP | Months before the IPO | SEBI and the exchanges (mainboard), or the exchange (SME) | Price band, dates, latest numbers | | RHP | Days before bidding opens | Registrar of Companies, and published by the exchanges | Final price and exact issue size | | Prospectus | After bidding, once the price is set | Registrar of Companies | Nothing; it has the final terms | ## The DRHP: the draft for review A company planning a mainboard IPO files a draft red herring prospectus with SEBI and the stock exchanges. The draft is made public for comments for at least 21 days. SEBI reviews it and may ask the company and lead managers questions. When it is satisfied, it issues its observations, which in practice is the go-ahead. The company must then open the IPO within 12 months, or file a fresh draft. For an SME IPO, the draft is filed with the stock exchange, BSE SME or NSE Emerge, which reviews it instead of SEBI. A DRHP already has most of the content: the business, three years of financials, risk factors, promoters, litigation and the planned use of the money. It does not have the price band or issue dates. Companies sometimes file addenda to update it. ## What is inside a DRHP or RHP Both documents follow the same structure, set by SEBI's disclosure rules. The sections that matter most to an investor are: - **Summary of the offer document:** the business, the issue, the promoters and the key numbers on a few pages. - **Risk factors:** every risk the company and its lawyers think worth disclosing, internal ones first. - **The offer and capital structure:** fresh issue, offer for sale, who sells, and the shareholding before and after. - **Objects of the issue:** how the fresh issue money will be used, item by item. - **Basis for the issue price:** earnings per share, return on net worth, key performance indicators and a comparison with listed peers. - **Our business and industry overview:** what the company does, its customers, plants and market. - **Financial information:** restated financial statements, usually for three years and a recent part-year. - **Outstanding litigation:** cases by and against the company, its promoters and directors. ## SEBI's review, stage by stage On SEBI's processing status list, a draft moves through a few stages. **Under process** means SEBI is still reviewing it, often after asking the lead managers questions. **Observations issued** means the review is done and the 12-month clock has started. A draft can also be **returned** to the company, **withdrawn** by it, or allowed to lapse when the 12 months run out without a launch. ## What happens between draft and launch Not every DRHP becomes an IPO. Companies wait for good markets, change the issue size or let the observations lapse. Some return a year later with a new draft. That is why a DRHP is a signal of intent, not a launch date. Our [IPO pipeline](/ipo/drhp/) tracks every draft with SEBI: under review, observations issued, or launched. ## The RHP: the document to read before you apply Once cleared, the company files the red herring prospectus with the Registrar of Companies before the issue opens. It updates the financials and disclosures from the draft. It still leaves out the final price and the exact number of shares, because those are set after bidding. The price band is announced separately, at least two working days before the issue opens, and is often added to the RHP. The RHP is long, often 400 pages or more. Our guide on [how to read an RHP](/learn/how-to-read-an-rhp/) covers the ten sections that matter most. ## The prospectus: the final numbers After bidding closes and the price is fixed, the company files the prospectus. It has the final issue price, issue size and number of shares. Fixed price issues, common among small SME IPOs, file a prospectus directly. The price is known from the start, so there is no red herring stage. You may also see an **abridged prospectus**, a short summary sent with application forms. It is useful for a quick look but leaves out much of the detail. ## A worked example Here is how one company might move through the three documents: 1. **14 July.** The company files its DRHP with SEBI. The draft is public for comments for 21 days. 2. **19 October.** SEBI issues observations. The company now has until 19 October next year to open the IPO. 3. **The following March.** Markets are good, so the company files its RHP, with financials updated to December. 4. **Two working days later.** It announces a price band of ₹150 to ₹158 and the bidding dates. 5. **After bidding closes.** The price is fixed at ₹158, and the prospectus is filed with the final issue size. The dates and prices are illustrative. Between steps 1 and 3 the issue size or the offer for sale can change, which is why the RHP, not the DRHP, is the document to rely on. ## What changes from DRHP to RHP Comparing the two is one of the best checks you can make. Look for: - **Issue size.** A smaller fresh issue or a larger offer for sale changes who gets the money. - **Financials.** The RHP adds newer periods. Check whether growth held up. - **Objects of the issue.** Changes in how the money will be used. - **Risk factors and litigation.** New cases or risks added since the draft. - **Pre-IPO share sales.** Shares issued or sold between the draft and the RHP, and at what price. ## Common mistakes to avoid - **Treating a DRHP as a launch.** It is a filing, not a date. Many drafts lapse. - **Relying on draft numbers.** The RHP may have different financials, issue size or objects. - **Reading only the abridged prospectus.** It leaves out most of the risk factors and the detail behind them. - **Ignoring the date of the financials.** If the latest period is many months old, ask what has happened since. ## Where to find them The DRHP is on the websites of SEBI, the stock exchanges and the lead managers. The RHP and prospectus are on the exchange websites under public issues. Each IPO page on this site links the offer document and summarises it, with the section behind every number. See [open and upcoming IPOs](/ipo/), or learn [what an IPO is](/learn/what-is-an-ipo/). ## Frequently asked questions **Does a DRHP mean the IPO will definitely happen?** No. Many companies file a DRHP and never launch, or let SEBI's observations lapse. The IPO is certain only once the RHP is filed and dates are announced. **How long after SEBI observations can a company open its IPO?** Up to 12 months from the date of SEBI's observations. After that the company has to file a fresh draft. **Why is it called a red herring prospectus?** Because it is complete in every respect except the final price and the number of shares, which are fixed only after bidding. **Which document should I read before applying?** The RHP. It has the latest financials, risk factors, objects of the issue and the basis for the price. **Who reviews SME IPO documents?** The stock exchange where the shares will list, BSE SME or NSE Emerge, rather than SEBI. **Can the numbers in the DRHP change before the IPO?** Yes. The issue size, the offer for sale, the financials and even the objects can change between the draft and the RHP. ## Sources - SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR), on draft offer documents, public comments and validity of observations - [SEBI, processing status of draft offer documents](https://www.sebi.gov.in/) Information only, not investment advice.