A DRHP (Draft Red Herring Prospectus) is the preliminary offer document a company files with SEBI when it wants to go public. It discloses the business model, audited financials, promoter and shareholder details, risk factors, and how the IPO proceeds will be used — but it does not yet state the issue price or the number of shares. SEBI reviews it and issues observations before the company can publish the final RHP.
Why it matters to you
If you hold unlisted shares of a company that has filed a DRHP, it is the single most useful public document you have. It tells you exactly how the company describes its own risks, its real revenue and profit, and — crucially — which existing shareholders are selling in the Offer For Sale. Reading it carefully is how you separate a genuine pre-IPO story from grey-market hype.
Example: Before an exchange operator's IPO, its DRHP revealed the full cap table and the lock-in applying to pre-IPO investors — information no broker tip could give you. See our guide on how to read a DRHP as a retail investor.