Categories: IPO

Draft Offer Document

There are many stages involved in an IPO. As a first step, a company has to file the draft offer document.

A draft offer document is the primary or the preliminary document to be filed by a company looking to raise funds through an IPO. This document has to be submitted to the SEBI at least 21 days prior to the filing of the offer document with the ROC. This time period is utilised for incorporating any changes as suggested by SEBI into the final offer document or the RHP.

SEBI usually takes approximately 30 days to process this document and suggest changes to it.

Other important details of draft offer document

The IPO issue’s lead managers are responsible for incorporating any changes as directed by SEBI. The draft offer document is made available on the website of SEBI to invite public comments on the document. SEBI may reject the draft offer document on certain grounds, including:
a. lack of clarity for utilisation of proceeds,
b. any severe pending litigation against the company or management/promoters or both,
c. unclear or complexity of the business model, etc.

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