BANKING AFFAIRS

Detailed explanation-1: -A red herring is a preliminary prospectus filed with the SEC, usually in connection with an IPO-excludes key details of the issue, such as price and number of shares offered. The document states that a registration statement has been filed with the SEC but is not yet effective.

Detailed explanation-2: -Now first let’s understand what is RHP? A Red Herring Prospectus, or offer document, is filed by a company to SEBI (Securities and Exchange Board of India) when it plans to raise money from the public by selling shares of the company to investors.

Detailed explanation-3: -A Draft Red Herring Prospectus (DRHP) is a document that is prepared to introduce a new business or product to a potential investor.

Detailed explanation-4: -Explanation.-For the purposes of this section, the expression “red herring prospectus” means a prospectus which does not include complete particulars of the quantum or price of the securities included therein.

Detailed explanation-5: -Red Herring prospectus refers to the preliminary prospectus filled by the company with SEC generally concerning the initial public offering by the company that contains the information of the company’s operation.