Fundamental Glossary / Indian Stock Market-Specific Fundamentals
DRHP
The Draft Red Herring Prospectus, filed with SEBI before a book-built public issue.
Formula
It contains the business, the financials, the risk factors, the objects of the issue, and the basis for the issue price. SEBI may issue observations. The document is a draft: the price band and the final numbers come later.
What it means
The DRHP is the first full fundamental document of an IPO. It is where related-party deals, litigation, and the restated financials are laid out before marketing begins.
Observations from SEBI can force changes. The RHP is the document that incorporates those and opens the offer.
How to read it
Read the risk factors that are specific, the use of proceeds, the capital structure after the issue, and the restated earnings. Skip the glossy business description until those pages are done.
What to watch
A DRHP is not an offer to sell. Numbers in it can change. Do not treat a draft price range, if one is discussed in the press, as the filed terms.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.