What is the difference between an offer document, an RHP, a prospectus and an abridged prospectus?
What is the difference between an offer document, an RHP, a prospectus and an abridged prospectus? What is a “draft offer doc”?
“Offer document” means a prospectus in the case of a public issue or offer for sale which is filed with Registrar of Companies (RoC) and the stock exchanges. An offer document covers all the relevant information required to help an investor to make his/her investment decision.
“Draft offer document” refers to an offer document in a draft stage. The draft offer documents are filed with Sebi at least 21 days prior to the filing of the offer document with the registrar and the exchanges. Sebi may specify necessary changes in the draft offer document and the issuer or the lead merchant banker is required to implement changes in the draft offer document before filing the offer document. The draft offer document is available on the Sebi website for public comments for a period of 21 days from the filing of the draft offer document with Sebi.
A red herring prospectus does not have details of either price or the number of shares being offered or the amount of issue. However, this prospectus mentions the number of shares and the upper and lower price bands. An issuer can also state that the issue size and the number of shares would be determined later. In case of a book-built issues, RHP is a process of price discovery and the price cannot be determined until the bidding process is completed. Hence, such details are not shown in the RHP filed with the RoC. Only on completion of the bidding process, the details of the final price are included in the offer document.
The offer document filed thereafter with ROC is called a prospectus. “Abridged prospectus” refers to a prospectus that contains all the salient features of a prospectus. It accompanies the application form of public issues.
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Hi,
A very nice explanation of the topics… I like the way you explain so well…
I would be pleased if you would like to write guest posts for our blog. http://www.equitipz.com and earn revenue with us. Please mail me if you are interested