If the IPO journey is like a movie production, then the DRHP is the Rough Draft of the script sent to the censor board for approval. The RHP, on the other hand, is the Final Trailer released to the public just before the movie hits the theaters.

Both are massive documents filled with financial data, but they appear at very different stages of the IPO process. For an Indian investor in 2026, reading these IPO papers is the only way to separate the high-quality businesses from the overhyped ones. While they look similar, the DRHP is for the regulator (SEBI) to check, and the RHP is for you, the investor, to decide whether to put in your hard-earned money.

What is a DRHP (Draft Red Herring Prospectus)?

The DRHP is the very first official document a company files to announce its intention to go public.

Who is it for? Primarily for SEBI.
Purpose: To let the regulator check if the company is following all the rules and being honest about its risks.
The Draft Status: It is called a draft because SEBI can (and usually does) ask the company to make changes, clarify its numbers, or add more details about its legal cases.

What is an RHP (Red Herring Prospectus)?

The RHP is the updated and finalized version of the DRHP, filed after SEBI gives its Observation Letter (approval).

Who is it for? Primarily for Investors.
Purpose: To provide the most up-to-date financial information so you can make an informed choice.
Why the Red Herring name? It gets this name because of a legal warning (traditionally printed in red ink) on the cover. This warning says that while most details are here, the final price and number of shares are still missing.

Key Differences: DRHP vs. RHP (2026)

Feature

DRHP (Draft Version)

RHP (Final Version)

Full Form

Draft Red Herring Prospectus

Red Herring Prospectus

Stage

Filed months before the IPO.

Filed days before the IPO.

Main Audience

SEBI & Market Analysts.

Public & Institutional Investors.

Price Details

No mention of price or price band.

Includes the Price Band and Dates.

SEBI Status

Pending Review/Approval.

SEBI Approved.

Usage

To seek regulatory Green Light.

To invite Subscriptions (Bids).

Why is the Price missing in the Red Herring?

You might find it strange that a 400-page document doesn't mention the most important thing: the price!

This is because most Indian IPOs in 2026 use the Book Building process. Instead of the company fixing a price, they want the market to decide. They provide a Price Band in the RHP (e.g., ₹500 - ₹510), and based on your bids, the final Cut-off Price is discovered on the last day of the IPO.

Frequently Asked Questions (FAQs)

Where can I download the DRHP or RHP?

You can find them for free on the SEBI website (under 'Offer Documents'), the company’s own website, or your broker’s IPO portal.

Does a DRHP guarantee that an IPO will happen?

No. Many companies file a DRHP but later cancel their plans if SEBI finds issues or if the market conditions turn bad.

What is the Validity of a DRHP?

Once SEBI gives its final approval on the DRHP, the company has 12 months to launch its IPO. If they miss this window, they have to file a fresh DRHP.

Why should a retail investor read the DRHP?

The DRHP contains the Risk Factors section. It tells you everything that could go wrong with the business like pending court cases or high debt which the company's ads won't tell you.

Is the RHP the Final Prospectus?

Almost, but not quite. The Final Prospectus is filed after the IPO closes, and it contains the final discovered price and the exact number of shares sold.

Can a company change its financials between DRHP and RHP?

Yes. Since the gap can be 4-6 months, the RHP usually contains the most recent quarterly financial results which might not have been available during the DRHP stage.

What is Confidential Filing?

In 2026, some companies use a Confidential DRHP route. This allows them to keep their secrets private from competitors until SEBI gives the initial approval.

Do SME IPOs also have DRHP and RHP?

Yes, but they are vetted by the Stock Exchanges (NSE/BSE) instead of SEBI.

What is the most important section to read in these documents?

Always look for Objects of the Offer (What will they do with your money?) and Risk Factors.

Do I need a CA to understand an RHP?

While the document is technical, the Summary section at the beginning is written in relatively simple language for regular investors to understand.

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