DRHP (Draft Red Herring Prospectus) and RHP (Red Herring Prospectus) are important documents in the process of an Initial Public Offering (IPO) in India. They provide information to potential investors about the company and the securities being offered. Here's what they mean and the key differences between them:

1. DRHP (Draft Red Herring Prospectus):

   • Meaning: The DRHP is the initial document that a company planning an IPO files with the Securities and Exchange Board of India (SEBI) and the stock exchanges. It is a preliminary version of the prospectus and contains all the relevant information about the company, its business, financials, and the proposed IPO. The "Red Herring" in the title signifies that certain details such as the offer price and the number of shares being offered are not disclosed at this stage.

   • Content: The DRHP provides a comprehensive overview of the company's operations, management, financial statements, risk factors, and the objectives of the IPO. It includes all material information about the company and the proposed offering but without specific details on the price and number of shares.

   • Review: SEBI reviews the DRHP to ensure that it complies with regulatory requirements. After receiving approval from SEBI, the company can proceed with the IPO process.

2. RHP (Red Herring Prospectus):

   • Meaning: The RHP is the final prospectus that is issued to potential investors shortly before the IPO begins. It includes all the information provided in the DRHP but also discloses the offer price, the number of shares being offered, and other specific details.

   • Content: The RHP is essentially the same as the DRHP but with the addition of the final offer price and the number of shares available for subscription. This allows investors to make informed decisions about whether to invest in the IPO.

   • Disclosure: The "Red Herring" in the title indicates that the RHP still includes a disclaimer stating that the document is subject to completion and change. This disclaimer informs investors that the details in the document, particularly the price and share quantity, may change before the IPO is launched.

   • Distribution: The RHP is widely distributed to potential investors, and it is available for public viewing on the websites of the stock exchanges and SEBI.

Differences between DRHP and RHP:

1. Timing: The DRHP is filed with SEBI and the stock exchanges initially, while the RHP is the final prospectus issued to potential investors just before the IPO launch.

2. Contents: The DRHP contains all the relevant information about the company except for specific details about the price and number of shares, while the RHP includes these final details.

3. Status: The DRHP is preliminary and subject to SEBI approval, while the RHP is the final offering document that investors use to make investment decisions.