Red Herring Prospectus Meaning Companies Act 2013

Red Herring Prospectus under Section 32 Companies Act 2013, means a prospectus which does not include complete particulars of the quantum or price of the securities included therein. Red Herring Prospectus is generally issued to public at least months before the original public issue date. Red Herring Prospectus shall be signed by all the Directors of the company. An Expert statement shall also be attached to the Red Herring Prospectus. Also Read our earlier posts on Shelf Prospectus, Bonus Issue of Shares,  Issue of Shares with Differential Voting Rights,  Section 189 of Companies Act 2013, Reduction of Share Capital and the concept of Right Shares under the Companies Act 2013.

Red Herring Prospectus Meaning SEBI PDF Companies Act 2013

Recent Red Herring Documents (Public Issues) PDF

Company Name Red Herring Prospectus
Majestic Research Services and Solutions Ltd Download
GreenSignal Bio Pharma Limited Download
Agro Phos India Ltd Download
Varun Beverages Limited Download
PNB Housing Finance Limited Download
Endurance Technologies Limited Download
Sakar Healthcare Limited Download
ICICI Prudential Life Insurance Company Limited Download
L&T Technology Services Limited Download

Red Herring Prospectus Definition

Section 32 of the Companies Act 2013  deals with Red Herring Prospectus. It provides that:

As per this section, 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 shall file it with the Registrar at least three days prior to the opening of the subscription list and the offer.

A red herring prospectus shall carry the same obligations as are applicable to a prospectus. Any variation between the red herring prospectus and a prospectus shall be highlighted as variations in the prospectus.

After Offer Closing

Upon the closing of the offer of securities, the prospectus stating therein the total capital raised, whether by way of debt or share capital, and the closing price of the securities and any other details as are not included in the red herring prospectus shall be filed with the Registrar and the Securities and Exchange Board.

When is Red Herring Prospectus issued

Red herring prospectus is issued during book building process. Red herring prospectus contains either the floor price of securities offered or a price band along with the range within which the Bids can move. The applicants bid for the shares quoting the price and the quantity that they would like to bid at. SEBI (ICDR) Regulations prescribe certain disclosures to be made in the red-herring prospectus.

Final Prospectus other than the Red Herring Prospectus

Once the offer for securities is closed, a final prospectus stating therein the total capital raised whether by way of debt or share capital, the closing price of the securities and any other details which are not complete in the red-herring prospectus shall be filed with SEBI in the case of listed public company and in any other case with the Registrar of companies only.

SEBI Guidelines for Red Herring Prospectus

The compliances under SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009 relating to shelf prospectus and red-herring prospectus is covered under chapter ‘Issue of Securities’ in paper Capital Markets and Securities Laws of Executive programme.

Quick Notes on Red Herring Prospectus

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 shall file it with the Registrar at least three days prior to the opening of the subscription list and the offer.

Any variation between the red herring prospectus and a prospectus shall be highlighted as variations in the prospectus.