## Red Herring Prospectus (RHP) [Section 32]

A Red Herring Prospectus is a prospectus that does not include complete particulars of the quantum (number of securities) or the price of securities — these are left to be decided after closure of the issue (e.g., book-building).

### Procedure

1. The company may issue an RHP prior to issuing the prospectus.

2. The RHP must be filed with the ROC at least 3 days before opening of the offer.

3. Upon closing of the offer, a prospectus stating the details not in the RHP (capital raised, closing price, etc.) must be filed with ROC and SEBI.

### Legal status

RHP carries the same obligations as a regular prospectus.
Any variation between the RHP and the final prospectus must be highlighted as variations in the prospectus.

Worked example

### Example 1

Q. XYZ Ltd. files an RHP with ROC for its IPO; the final price is yet to be decided. After completing the book-building process, the company finalises the issue price at ₹250 per share and files the final prospectus with ROC. Is this procedure compliant with Section 32?

A. Yes. Section 32 permits issue of an RHP where quantum/price is undecided, provided it is filed with ROC at least 3 days before opening of the offer and the final prospectus (with capital raised, closing price etc.) is filed with ROC and SEBI after closure. Any variation must be highlighted.

⚠️ Common exam mistakes

Filing the RHP on the same day as the offer opens — it must be at least 3 days prior.
Forgetting that the post-closure prospectus must be filed with both ROC and SEBI.
Assuming an RHP has lighter obligations than a regular prospectus — it has the same.

Bare-Act text Section 32 · Companies Act, 2013 · click to expand

A company proposing to make an offer of securities may issue a red herring prospectus prior to the issue of a prospectus. A company proposing to issue a red herring prospectus under sub-section (1) shall file it with the Registrar at least three days prior to the opening of the subscription list and the offer.

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