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Disclosures/Offer Documents
Since 1992, the
entire IPO/FPO
regulation is driven
by
disclosures-inform
the investors as
much as is possible
and is relevant for
him to take an
informed investment
decision. The
disclosure
requirements
regarding the
issuance of
securities are
covered in detail in
the SEBI ICDR
Regulations 2009.
Types of Offer
Documents
Draft Offer
Document refers
to the first
document filed by
companies with SEBI
and stock exchanges
for approval, who
after reviewing,
communicate their
observations to the
Company, which the
company has to
incorporate in the
offer document. SEBI
typically requires a
period of 30 days
for processing a
draft offer
document. The draft
offer document is
placed by SEBI on
its website for
public comments for
a period of 21 days.
Red herring
prospectus A red
herring prospectus (RHP)
is a preliminary
registration
document that is
filed with SEBI in
the case of
bookbuilding issue
which does not have
details of either
price or number of
shares being offered
or the amount of
issue. This means
that in case price
is not disclosed,
the number of shares
and the upper and
lower price bands
are disclosed. On
the other hand, an
issuer can state the
issue size and the
number of shares are
determined later. In
the case of
book-built issues,
it is a process of
price discovery as
the price cannot be
determined until the
bidding process is
completed. Hence,
such details are not
shown in the Red
Herring prospectus
filed with ROC in
terms of the
provisions of the
Companies Act. 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.
Offer Document means
the final prospectus
in the case of a
public issue/offer
for sale which is
filed and registered
with the Registrar
of Companies and the
stock exchanges. An
offer document
covers all the
relevant information
required to be
disclosed under
various regulations
and incorporates the
observations of the
Registrar of
Companies and SEBI.
Abridged
Prospectus the
memorandum as
prescribed in Form
2A under sub-section
(3) of section 56 of
the Companies Act,
1956. It contains
all the salient
features of a
prospectus. It
accompanies the
application form of
public issues.
Accessing draft
offer documents
before even the IPO/FPO
is cleared by SEBI
The draft offer
document/letter of
offer remains posted
on SEBI website for
a period of 21 days
from the date of
filing the same to
SEBI and can also be
downloaded from
there
Public
comments/complaints
on the issuer
company or others
connected with the
issue
The objective of
making an offer
document public is
to invite public
comments. The
comments should be
submitted within 21
days of the filing
of the draft offer
document by the
company with SEBI.
Obtaining full
copy of the offer
document
Full copy of the
offer document is
available from the
company, its lead
managers and
syndicate members.
These are also
available on the
websites of SEBI,
the lead managers,
the stock exchanges
and the company. |