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Microlesson · 5-min read

Abridged Prospectus (Sec 33)

# Section 33 — Abridged Prospectus

## Definition [Sec 2(1)]

An abridged prospectus is a summary of the prospectus containing the salient features as specified by SEBI through regulations.

## Why an Abridged Prospectus?

  • A full prospectus is voluminous, expensive to print, and overwhelming for retail investors.
  • An abridged version is cheaper to produce and easier for investors to digest, while still capturing key disclosures.

## Mandatory Accompaniment with Application Form

Every application form for shares or debentures must be accompanied by an abridged prospectus.

### Exceptions — When NOT Required

The accompaniment rule does not apply if the form is issued in connection with:

1. An underwriting agreement for the shares or debentures;

2. Shares or debentures not offered to the public; OR

3. An offer made only to existing members of the company.

## Right to Receive Full Prospectus

Any person may request a copy of the full prospectus before the closing of the subscription list and offer. The company must furnish it.

## Penalty

A company failing to comply with Section 33 is penalized with ₹50,000 for each default.

## Quick Recap

AspectRule
WhatSalient-features summary of prospectus
WhereMust accompany every application form
Investor's rightFree full prospectus on request before closure
Default penalty₹50,000 per default

Worked example

### Example 1

Example: A company issues application forms for its rights issue to existing members without attaching an abridged prospectus. Is this a violation?

Answer: No. Offers to existing members are excepted under Sec 33. Abridged prospectus is not mandatory.

⚠️ Common exam mistakes

  • Confusing 'abridged prospectus' with 'red herring prospectus' — abridged is a summary; RHP is a full prospectus minus price/quantity.
  • Forgetting the three exceptions to the accompaniment requirement.
  • Quoting wrong penalty figure — Sec 33 default is ₹50,000 per instance.
Bare-Act text Section 33 · Companies Act, 2013 · click to expand
Section 33(1): No form of application for the purchase of any of the securities of a company shall be issued unless such form is accompanied by an abridged prospectus. Provided that nothing in this sub-section shall apply if it is shown that the form of application was issued— (a) in connection with a bona fide invitation to a person to enter into an underwriting agreement with respect to such securities; or (b) in relation to securities which were not offered to the public.
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