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INTERVIEW QUESTIONS
INVESTMENT
INITIAL PUBLIC OFFERING IPO
DETAILS
Question: What is a Red Herring Prospectus for an IPO?
Answer: Red Herring Prospectus is a prospectus, 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. An RHP for and FPO can be filed with the RoC without the price band and the issuer, in such a case will notify the floor price or a price band by way of an advertisement one day prior to the opening of the issue. In the case of book-built issues, it is a process of price discovery and 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.
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Question:
What is a Red Herring Prospectus for an IPO?
Answer:
Red Herring Prospectus is a prospectus, 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. An RHP for and FPO can be filed with the RoC without the price band and the issuer, in such a case will notify the floor price or a price band by way of an advertisement one day prior to the opening of the issue. In the case of book-built issues, it is a process of price discovery and 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. Source: CoolInterview.com
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What are the relevant regulations and where do I find them related to IPOs?
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What are the dos and don'ts for bidding / applying in the IPO issue?
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Is there any preference while doing the allotment of an IPO?
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Is the issue price for placement portion and net offer to public for an IPO, the same?
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Is it possible to enter bids less than floor price?
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Is it compulsory for me to have a Demat Account?
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Is grading in Initial Public Offer (IPO) optional?
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