What is DRHP in IPO? Meaning, Importance & Process Explained

When a company decides to raise capital from the public and get listed on the stock exchange, one of the most critical documents it files is the Draft Red Herring Prospectus (DRHP) . This document forms the basis of transparency, compliance, and trust in the IPO (Initial Public Offering) process. But what exactly is DRHP in IPO ? Why does it matter so much to investors? And how does the process work? This blog answers all your questions with clarity and depth so you can understand the IPO process better. What is DRHP in IPO? DRHP in IPO stands for Draft Red Herring Prospectus , a document submitted by a company to the Securities and Exchange Board of India ( SEBI ) before launching an IPO. It provides in-depth information about the company’s financials, business model, risk factors, promoters, and objectives of the IPO, but excludes the issue price and number of shares . The DRHP is essentially a preliminary disclosure that allows SEBI and investors to evaluate the m...