Red Herring Prospectus (RHP) in India

A red herring prospectus (RHP) is the offer document an Indian company files with the Registrar of Companies, SEBI and the stock exchanges for a book-built public issue before the issue price is fixed. Section 32 of the Companies Act 2013 defines it as “a prospectus which does not include complete particulars of the quantum or price of the securities included therein”. Its contents are prescribed by Regulation 24 and Schedule VI Part A of the SEBI (ICDR) Regulations 2018 .

The RHP is the document every bid in an initial public offering is made against. It carries the price band , the bid dates, the lot size , the objects of the issue, three years of restated financial statements, the risk factors, the litigation record and the allocation between investor categories. Section 32(3) gives it “the same obligations as are applicable to a prospectus”, so an untrue statement in it carries the same criminal and civil liability as one in a final prospectus.

The RHP sits between two other documents. Before it comes the draft red herring prospectus (DRHP), filed with SEBI for observations and public comment. After it comes the prospectus, filed once the book building closes, which states one price and the total capital raised. In the National Stock Exchange of India IPO of September 2026, the RHP was dated 10 September, the offer ran from 17 to 21 September, the prospectus was dated 21 September and the shares listed on 24 September 2026.

The rules changed in 2025 and again in 2026. The SEBI (ICDR) (Amendment) Regulations 2025, in force 8 March 2025, merged the pre-issue and price band advertisements and moved the start of the 21-day comment period. The ICDR (Amendment) Regulations 2026, in force 21 March 2026, removed the offer document summary section and replaced it with a draft abridged prospectus filed alongside the DRHP, and put a QR code linking to the RHP on every application form.

Legal basis: Companies Act 2013 and the ICDR Regulations

The red herring prospectus is a creature of company law, and its contents are a creature of securities regulation. Section 32 of the Companies Act 2013 authorises it and fixes its legal status; the SEBI (ICDR) Regulations 2018, as amended up to 21 March 2026, fix what it must contain and when it must be filed.

Section 32 of the Companies Act 2013

Section 32 has four sub-sections:

Source: Companies Act 2013, section 32, India Code text.

Other sections of the Act apply because the RHP is a prospectus in law. Section 26 sets the contents and requires a copy signed by every director to be delivered to the Registrar on or before publication; section 26(8) makes a prospectus invalid if issued more than 90 days after delivery. Section 28 deems an offer-for-sale document to be a prospectus issued by the company. Section 33 bars any application form unless it comes with an abridged prospectus. Section 40 requires the company to apply to a recognised stock exchange for listing before the offer and to keep application money in a separate scheduled-bank account.

SEBI (ICDR) Regulations 2018

The ICDR Regulations do not define “red herring prospectus” separately. Regulation 2(1)(kk) defines an “offer document” as “a red herring prospectus, prospectus or shelf prospectus, as applicable, referred to under the Companies Act, 2013”, which imports the section 32 meaning.

The operative provisions for a mainboard IPO sit in Chapter II:

• Regulation 24(2): the RHP and prospectus contain the disclosures specified in the Companies Act 2013 and in Schedule VI Part A.
• Regulation 24(1): the offer document contains “all material disclosures which are true and adequate to enable the applicants to take an informed investment decision”.
• Regulation 25: the DRHP is filed with SEBI and the exchanges through the lead managers; Regulation 25(7) requires the RHP, with the abridged prospectus, to be filed with SEBI and the exchanges promptly after RoC filing.
• Regulation 29: the floor price or price band.
• Regulations 44 to 46: validity of SEBI’s observations, the filing-to-opening gap, minimum subscription and the bid period.
• Schedule XIII: book building, including anchor investors and bid revision.

Chapter II was last amended on 21 March 2026. The ICDR Regulations have not been replaced, unlike the mutual fund, stock broker and portfolio manager regulations, which SEBI replaced with new 2026 regulations.

RHP, DRHP and prospectus compared

The three documents carry the same disclosures at different stages, and differ in who receives them, whether a price appears, and what legal step they trigger.

Sources: Companies Act 2013, section 32; SEBI (ICDR) Regulations 2018 as amended to 21 March 2026; NSE red herring prospectus and prospectus, September 2026.

The NSE row shows what changes between draft and final. Several selling shareholders reduced their quantities between the DRHP and the RHP, cutting the offer by 15.1 per cent before a price band was set.

Filing timeline from DRHP to listing

The red herring prospectus is filed after SEBI’s observations on the draft and at least three working days before bidding opens; the shares list on the third working day after bidding closes. Each step has its own regulation:

1. DRHP filed with SEBI, in three copies, and with the stock exchanges (ICDR Regulation 25(1) and (3)). Since 8 October 2025, shares held by promoters, the promoter group, selling shareholders, directors, key managerial personnel and several other holder categories must be in demat form before the DRHP is filed (Regulation 7(1)(c)).
2. Public announcement within two working days of filing, in an English national daily, a Hindi national daily and a regional-language newspaper (Regulation 26(2)).
3. Public comment for at least 21 days from the public announcement (Regulation 26(1), as amended with effect from 8 March 2025).
4. SEBI observations within 30 days from the later of receipt of the DRHP, a satisfactory reply from the lead managers, information from another regulator, and the exchanges’ in-principle approval (Regulation 25(4)).
5. Validity: the issue must open within 12 months of SEBI’s observations, or 18 months under the confidential pre-filing route (Regulation 44(1)).
6. RHP filed with the RoC at least three working days before the issue opens (Regulation 44(2)), then with SEBI and the exchanges (Regulation 25(7)).
7. Price band announced at least two working days before opening, in a combined pre-issue and price band advertisement in the newspapers used for the public announcement (Regulation 29(4)).
8. Anchor bidding one working day before the issue opens (Schedule XIII Part A para (10)(e)).
9. Bidding for at least three and at most ten working days (Regulation 46(1)).
10. Prospectus filed with the RoC and SEBI after the issue closes (Companies Act s.32(4)).
11. Listing on T+3, where T is the issue closing day (SEBI circular SEBI/HO/CFD/TPD1/CIR/P/2023/140 dated 9 August 2023).

The T+3 timetable in the SEBI Master Circular for ICDR (last updated 9 February 2026) fixes the intermediate steps: bids close at 4 pm for QIBs and non-institutional investors and 5 pm for retail on day T; the basis of allotment is finalised before 6 pm on T+1; shares are credited before 6 pm on T+2; and trading starts on T+3. The IPO listing timeline article covers the post-close steps in detail.

Three IPOs on the timeline

The table sets out the offer-document dates of three mainboard issues side by side. It is a webnotes.in comparison built from the dates printed in each document.

Sources: Zomato RHP dated 6 July 2021 (BSE copy); Hyundai Motor India prospectus dated 17 October 2024 (SEBI copy); NSE RHP dated 10 September 2026 and BSE notice 20260923-39.

The NSE issue shows T+3 in operation. Bidding closed on Monday 21 September 2026; T+1 and T+2 were 22 and 23 September, and the shares traded on Thursday 24 September. Its bid period contained only three bidding days, because 19 and 20 September fell on a weekend.

Contents of a red herring prospectus

An RHP contains every disclosure in the Companies Act 2013 plus everything in Schedule VI Part A of the ICDR Regulations (Regulation 24(2)). Schedule VI Part A runs from the cover page to the declarations, and the sections below are the ones an investor reads most.

Cover page and the SEBI disclaimer

The cover page names the issuer, the type of issue (fresh issue , offer for sale or both), the book running lead managers with their SEBI registration numbers, the registrar to the issue , and the bid dates. It carries the general risk statement in the form the Zomato RHP of 2021 used: the shares “have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of the contents of this Red Herring Prospectus”.

Risk factors

Risk factors are listed as internal and external risks, with the most material first. The Zomato RHP opened its list with “We have a history of net losses and we anticipate increased expenses in the future.” That sentence was risk factor number 1 of a document that ran to 420 pages.

Offer document summary, omitted in 2026

Until 20 March 2026, Schedule VI Part A clause (4) required a summary section near the front of the RHP. The ICDR (Amendment) Regulations 2026 omitted it with effect from 21 March 2026 and moved the summary function into the abridged prospectus in Schedule VI Part E, which includes a summary of contingent liabilities and a summary of related party transactions. An RHP filed on or after 21 March 2026 therefore has no summary section, and a reader looking for one should open the abridged prospectus.

Objects of the issue

The objects section states how the fresh-issue proceeds will be spent; offer-for-sale proceeds go to the selling shareholders and are outside it. Two limits apply under ICDR Regulation 7:

• General corporate purposes may not exceed 25 per cent of the amount raised (Regulation 7(2)).
• General corporate purposes plus unidentified acquisition or investment targets may not exceed 35 per cent combined, with unidentified targets alone capped at 25 per cent (Regulation 7(3), in force 14 January 2022). The limits do not apply where the target is identified and disclosed.

Where the issue size, excluding the offer for sale, exceeds Rs 100 crore, Regulation 41 requires a SEBI-registered credit rating agency to monitor use of proceeds and report every quarter until 100 per cent of the proceeds are used. Each report is published within 45 days of the quarter end.

An offer with no fresh issue has no objects to monitor. The Hyundai Motor India RHP of October 2024 stated the fresh issue as “Not applicable”: the entire offer was 142,194,700 shares sold by Hyundai Motor Company, raising Rs 27,855.68 crore net of the employee discount at an offer price of Rs 1,960. The NSE offer of 2026 was also an offer for sale only.

Basis for issue price and key performance indicators

The basis for issue price section explains how the issuer and lead managers arrived at the price band. The SEBI (ICDR) (Fourth Amendment) Regulations 2022, applicable to every RHP filed with the RoC on or after 21 November 2022, added key performance indicator (KPI) disclosures to Schedule VI Part A para (9)(K). The RHP must:

• disclose all KPIs the issuer disclosed to its investors at any time in the three years before filing;
• have the KPIs approved by the audit committee and certified by the statutory auditor or a peer-reviewed chartered accountant or cost accountant;
• compare them with listed peers;
• state the price per share of primary and secondary transactions in the 18 months before filing that involved 5 per cent or more of fully diluted capital;
• show the floor and cap as multiples of the weighted average cost of acquisition, a table repeated in the price band advertisement under “Risks to Investors”;
• carry a recommendation from a committee of independent directors that the price band is justified.

The issuer must keep disclosing the same KPIs at least annually for one year after listing or until the proceeds are fully used, whichever is later. SEBI circular SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/28 dated 28 February 2025 added industry standards for KPI disclosure, written by the Industry Standards Forum of ASSOCHAM, CII and FICCI under the aegis of the stock exchanges, for every draft offer document or offer document filed on or after 1 April 2025.

Some IPO references attribute the KPI requirement to a “SEBI circular SEBI/HO/CFD/DIL2/CIR/P/2022/0002 dated 4 January 2022”. No circular with that number appears in SEBI’s Master Circular for ICDR of 9 February 2026 or its list of rescinded circulars, and the footnote in the consolidated ICDR text attributes the KPI provisions to the Fourth Amendment of November 2022, so the January 2022 citation is wrong.

Restated financial information

Schedule VI Part A para (11) requires restated consolidated financial statements under Ind AS for three financial years and a stub period, audited by a peer-reviewed statutory auditor or chartered accountant. A stub period is required where the latest full-year statements are older than six months from the date of filing, and Regulation 24(5) separately requires the lead managers to ensure the restated figures in the offer document are not more than six months old from the issue opening date.

Promoters, management, related parties and litigation

These sections profile each promoter , selling shareholder, director and senior manager, list related party transactions, and set out outstanding criminal, regulatory, tax and material civil proceedings against the issuer, its subsidiaries, promoters and directors. The litigation section states the amount involved in each category of proceedings, which gives the reader the contingent exposure in rupees.

Offer structure and procedure

The offer procedure section describes the ASBA and UPI ASBA bid routes, the cut-off price option and the allocation in ICDR Regulation 32(1): not less than 35 per cent to retail individual investors , not less than 15 per cent to non-institutional investors , and not more than 50 per cent to qualified institutional buyers , with 5 per cent of the QIB portion set aside for mutual funds.

Price band rules

A red herring prospectus may state a floor price or a price band, while the prospectus filed with the RoC “shall contain only one price” (ICDR Regulation 29(1)). Regulation 29(2) caps the band at 120 per cent of the floor, and a proviso inserted with effect from 14 January 2022 sets a minimum: the cap “shall be at least one hundred and five percent of the floor price”.

The NSE band of Rs 1,700 to Rs 1,785 was exactly 105 per cent, the narrowest band the regulation allows. The floor and cap are announced at least two working days before opening, with financial ratios computed at both ends of the band (Regulation 29(4) and (5)).

The band can be revised during bidding by up to 20 per cent on either side (Schedule XIII Part A para (7)(b)(ii)). A revision is disseminated through the exchanges, a public notice, the issuer’s website and the syndicate terminals, and Regulation 46(2) requires the bid period to be extended by at least three working days, with the total bid period still capped at ten working days.

Anchor investors and the RHP

The RHP discloses the anchor investor portion, and anchor bidding happens one working day before the issue opens. The rules in Schedule XIII Part A para (10), as amended with effect from 1 December 2025, are:

• Up to 60 per cent of the QIB portion may go to anchor investors , each bidding at least Rs 10 crore on the main board.
• Forty per cent of the anchor portion is reserved: 33.33 per cent for domestic mutual funds and 6.67 per cent for life insurance companies and pension funds. Before 1 December 2025, one-third was reserved for domestic mutual funds alone.
• If the final price is above the anchor price, anchors pay the difference; if it is below, they get no refund.
• Half the anchor shares are locked in for 30 days and half for 90 days from allotment.

Material developments and addenda during the offer

An issuer must make “a prompt, true and fair disclosure of all material developments which take place between the date of filing offer document and the date of allotment” by public notice in every newspaper that carried the pre-issue advertisement (ICDR Schedule IX para (4)). Lead managers file a Form D due diligence certificate when such a notice is issued (Regulation 25(9)(e)). In practice the notice is published as an addendum to the RHP, and the changes it makes are carried into the prospectus.

The Zomato addendum dated 11 July 2021, three days before its offer opened, did two things:

• It extended risk factor 45 on changing regulations to mention the June 2021 consultation paper of the Ministry of Consumer Affairs, Food and Public Distribution proposing amendments to the Consumer Protection (E-Commerce) Rules 2020.
• It added item 74, a letter dated 9 July 2021 from the company to SEBI, to the list of material contracts and documents for inspection.

The addendum stated that the changes would “be appropriately included in the Prospectus, as and when filed with the RoC”. It gave no special right to withdraw. The ICDR Regulations contain no addendum-triggered withdrawal right for a public issue. The general rule applies: retail individual investors “may either withdraw or revise their bids until the closure of the issue”, while qualified institutional buyers and non-institutional investors “shall not be permitted to withdraw or lower the size of their bids at any stage of the issue” (Schedule XIII Part A para (12)(h) and (i)).

Confidential pre-filing and UDRHP-I

Since 21 November 2022, a mainboard issuer may use the confidential pre-filing route in Chapter IIA of the ICDR Regulations instead of filing a public DRHP. The route changes the documents that precede the red herring prospectus:

The issuer announces only the fact of pre-filing, within two working days, and the announcement must say that pre-filing “shall not necessarily mean that the issuer shall undertake the initial public offering” (Regulation 59C(5)). SEBI’s 30-day observation clock runs from the latest of six trigger dates, including completion of any interaction with qualified institutional buyers (Regulation 59C(6)), and the issue must open within 18 months of the observations.

Liability for misstatements in the RHP

Section 32(3) of the Companies Act 2013 gives the RHP the same obligations as a prospectus, so the prospectus liability provisions in sections 34 to 37 apply to it in full.

Criminal liability, section 34. Where a prospectus includes a statement “which is untrue or misleading in form or context”, or omits a matter likely to mislead, every person who authorised its issue is liable under section 447. The defence is that the statement or omission was immaterial, or that the person had reasonable grounds to believe, and did believe up to the time of issue, that the statement was true. Section 447 punishes fraud involving at least Rs 10 lakh or 1 per cent of turnover, whichever is lower, with imprisonment of six months to ten years and a fine from the amount involved up to three times that amount; where public interest is involved the minimum term is three years.

Civil liability, section 35. A person who subscribed on the faith of a misleading prospectus can claim compensation from directors at the time of issue, persons named as directors, promoters, every person who authorised the issue, and experts whose statements are included. Section 35(2) allows defences for a director whose consent was withdrawn before issue, for issue without knowledge followed by public notice, and, since 9 February 2018, for an expert’s statement relied on in good faith. Where there was intent to defraud, section 35(3) makes the person liable “without any limitation of liability”.

Fraudulent inducement, section 36. Anyone who knowingly or recklessly makes a false, deceptive or misleading statement, promise or forecast, or deliberately conceals material facts, to induce a person to enter into a securities agreement is liable under section 447. Section 37 lets any affected person, group or association bring a suit under sections 34, 35 or 36.

SEBI penalties. Fraudulent disclosure in an offer document is a fraudulent and unfair trade practice under the SEBI (PFUTP) Regulations 2003 , penalised under section 15HA of the SEBI Act 1992 : not less than Rs 5 lakh, up to Rs 25 crore or three times the profits made, whichever is higher. Section 15HB, the residual penalty for a contravention with no separate penalty, runs from Rs 1 lakh to Rs 1 crore; the Rs 25 crore ceiling sometimes attached to it belongs to section 15HA.

RHP compared with a QIP placement document

A qualified institutions placement by an already listed company does not use a red herring prospectus. Chapter VI of the ICDR Regulations (Regulation 171 onward) governs it, and it runs on a preliminary placement document and a placement document (Regulation 175(2)). These are “serially numbered and copies of the same shall be circulated only to select investors” (Regulation 175(3)). They are placed on the exchange and issuer websites with a disclaimer that “no offer is being made to the public” (Regulation 175(4)).

There is no SEBI filing or observation step: the lead manager gives each exchange a due diligence certificate and a copy of the preliminary placement document (Regulation 174(3)). Retail investors and non-institutional investors cannot bid. QIPs sat in Chapter VIII of the repealed ICDR Regulations 2009, which is why older references still cite that chapter.

Common misreadings of the RHP

SEBI observations are not approval. SEBI issues observations under Regulation 25(4), and every RHP states that SEBI has not recommended or approved the shares.

The RHP is not a draft. Section 32(3) gives it the obligations of a prospectus. It is the binding offer document for the bid period, not a working version.

The prospectus is not a one-page price sheet. Section 32(4) requires it to carry the total capital raised, the closing price and every detail missing from the RHP, with variations highlighted; Hyundai’s prospectus of 17 October 2024 is a full offer document.

The grey market is outside the RHP. The grey market premium is an unofficial pre-listing quote with no basis in the ICDR Regulations and no place in the offer document.

Link Intime is now MUFG Intime. Link Intime India Private Limited, registrar to many issues including Zomato’s, changed its name to MUFG Intime India Private Limited with effect from 31 December 2024. RHPs filed before that date name Link Intime ; later ones name MUFG Intime or KFin Technologies , which was registrar to the Hyundai offer.

Reading an RHP efficiently

Five parts of the RHP answer most investor questions, in this order:

1. The cover page and the offer structure: fresh issue or offer for sale, the price band, the lot size and the dates.
2. The objects of the issue: how much goes to the company, and what share is general corporate purposes against the 25 per cent cap.
3. The first ten risk factors.
4. The basis for issue price: KPIs, peer comparison and the weighted average cost of acquisition table.
5. Outstanding litigation and contingent liabilities, also summarised in the abridged prospectus.

The reading an RHP guide works through each section in more detail, and the how-to guide on checking allotment with the registrar covers the step after the issue closes.

See also

• Draft red herring prospectus , the SEBI-review precursor to the RHP
• Reading an RHP , a section-by-section guide
• Initial public offering , the wider IPO process
• IPO process in India , the step sequence from board approval to listing
• Mainboard IPO , eligibility and allocation on the main board
• SME IPO , the separate SME platform regime
• Book building , the price-discovery process the RHP governs
• IPO price band , floor, cap and revision rules
• IPO lot size , the minimum bid unit
• Cut-off price , the retail bidding option
• Anchor investor , the pre-opening institutional allocation
• Qualified institutional buyer , the institutional investor category
• IPO investor categories , retail, HNI and QIB tranches
• Basis of allotment , how shares are allocated after bidding
• IPO listing timeline after close , the T+3 steps
• IPO listing day , the first trading session
• Offer for sale , the secondary component of an IPO
• Qualified institutions placement , the listed-company alternative
• Abridged prospectus , the summary document filed with the RHP
• Book running lead manager , the merchant banker who files the RHP
• Registrar to an issue , the RTA named on the cover page
• KFin Technologies and Link Intime , registrars named in most RHPs
• ASBA and UPI ASBA , the application routes
• Promoter , the controlling shareholder profiled in the RHP
• SEBI (ICDR) Regulations 2018 , the governing regulations
• SEBI ICDR summary , a shorter overview
• SEBI (LODR) Regulations , the obligations that start at listing
• SEBI (PFUTP) Regulations 2003 , the fraud provisions behind offer-document penalties
• SEBI Act 1992 , the penalty sections
• Companies Act 2013 , the statutory basis in section 32
• Registrar of Companies , where the RHP is filed
• SEBI , the securities regulator
• National Stock Exchange of India IPO , the worked example used here
• Grey market premium , the unofficial quote outside the RHP

External references

• SEBI (ICDR) Regulations 2018, as amended up to 21 March 2026
• Companies Act 2013, India Code
• SEBI public issues: offer documents filed
• BSE public issues
• KFin Technologies IPO allotment status
• MUFG Intime India public issues

References

1. Companies Act 2013 (Act 18 of 2013), sections 26, 28, 32, 33, 34, 35, 36, 37, 40 and 447.
2. Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2018, as amended up to 21 March 2026: Regulations 2(1)(kk), 7, 24, 25, 26, 29, 32, 41, 44, 46, 59A to 59C, 171 to 175; Schedules VI, IX and XIII.
3. SEBI (ICDR) (Fourth Amendment) Regulations 2022, in force 21 November 2022 (key performance indicators and Chapter IIA).
4. SEBI circular SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/28 dated 28 February 2025, Industry Standards on Key Performance Indicators disclosures.
5. SEBI circular SEBI/HO/CFD/TPD1/CIR/P/2023/140 dated 9 August 2023, reduction of listing timeline from T+6 to T+3.
6. SEBI Master Circular for Issue of Capital and Disclosure Requirements, HO/49/14/14(2)2026-CFD-POD2/I/4518/2026, updated 9 February 2026.
7. Securities and Exchange Board of India Act 1992, sections 15HA and 15HB.
8. Zomato Limited, Red Herring Prospectus dated 6 July 2021, and Addendum dated 11 July 2021.
9. Hyundai Motor India Limited, Red Herring Prospectus dated 8 October 2024 and Prospectus dated 17 October 2024.
10. National Stock Exchange of India Limited, Red Herring Prospectus dated 10 September 2026 and Prospectus dated 21 September 2026.