Section 32: Red herring prospectus
This section is for the rules and requirements related to issuing a red herring prospectus before offering securities.
The section, clause by clause
What the section says
In plain terms
(1)A company proposing to make an offer of securities may issue a red herring prospectus prior to the issue of a prospectus.
A company that plans to offer securities can issue a red herring prospectus before issuing the actual prospectus.
(2)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.
The company must file the red herring prospectus with the Registrar at least 3 days before the subscription list and offer open.
(3)A red herring prospectus shall carry the same obligations as are applicable to a prospectus and any variation between the red herring prospectus and a prospectus shall be highlighted as variations in the prospectus.
A red herring prospectus has the same obligations as a regular prospectus and must highlight any differences between the two documents.
(4)Upon the closing of the offer of securities under this section, 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.
After the offer of securities is closed, the company must file a prospectus with the Registrar and the Securities and Exchange Board that includes the total capital raised, closing price, and other details not in the red herring prospectus.
explanationExplanation.—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.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Referred to by
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.