What is a draft red herring prospectus?

A Draft Red Herring Prospectus (DRHP) is a document that is prepared to introduce a new business or product to a potential investor. It should also include sections on the current status of the business, as well as any risks involved with investing in this company.

What is red herring prospectus as per Companies Act 2013?

Explanation. —For the purposes of this section, the expression “red herring prospectus” means a prospectus which does not include complete particulars of the quantum or price of the securities included therein.

What is red herring prospectus Quora?

Originally Answered: What is red herring prospectus? This is an initial prospectus and contains all the information about the company and the offer except the offer price and the effective date. This document is used by the underwriters and the company to market the company’s shares to public investors.

What is red herring prospectus under Companies Act 2013?

The word “red-herring prospectus” has been specified in the explanation to the Section 32 of the Companies Act, 2013 to imply that, “A prospectus that does not include complete particulars of the quantum or price of the securities included in such prospectus.”[

Which section in the Companies Act 2013 mentions about red herring prospectus?

section 32
According to section 32 a company proposing to make an offer of securities may issue a red herring prospectus prior to the issue of a prospectus. Such company proposing to issue a red herring prospectus shall file it with the Registrar at least three days prior to the opening of the subscription list and the offer.

What is red abridged prospectus?

An abridged prospectus is defined as a memorandum comprising such prominent aspects of a prospectus as may be prescribed by the Securities and Exchange Board by establishing regulations in this matter, according to section 2(1) of the Companies Act 2013. It is therefore a document containing a prospectus summary.

What is prospectus under Companies Act 2013?

The Companies Act, 2013 defines a prospectus under section 2(70). Prospectus can be defined as “any document which is described or issued as a prospectus”. This also includes any notice, circular, advertisement or any other document acting as an invitation to offers from the public.

What are the different types of prospectus?

Prospectus

• The prospectus is a legal document, which outlines the company’s financial securities for sale to the investors.
• According to the companies act 2013, there are four types of the prospectus, abridged prospectus, deemed prospectus, red herring prospectus, and shelf prospectus.

What is a red herring prospectus?

A prospectus is a legal document by which a public company raises money from investors. One of the types of prospectus is Red Herring Prospectus. As per Section 32 of Companies Act, 2013, a company proposing to make an offer of securities may issue a red herring prospectus prior to the issue of a prospectus.

What is a prospectus under Companies Act 2013?

The Companies Act, 2013 defines a prospectus under section 2 (70). Prospectus can be defined as “any document which is described or issued as a prospectus”. This also includes any notice, circular, advertisement or any other document acting as an invitation to offers from the public.

What is a draft offer document?

The same document i.e. offer document is called “letter of offer” in case of “rights issue” and “prospectus” in case of public issue. Now let’s see what is draft offer document- Offer document has 3 types (draft offer document, red herring prospectus and abridged prospectus). Draft offer document is an unfinalised document.

What are the provisions related to shelf prospectus?

The provisions related to shelf prospectus has been discussed under section 31of the Companies Act, 2013. The regulations are to be provided by the Securities and Exchange Board of India for any class or classes of companies that may file a shelf prospectus at the stage of the first offer of securities to the registrar.