What is the Life Cycle of an IPO?

Stage 1:  Draft Offer document

Draft Offer document is a PDF file containing information of an investor who wants to know about the public issue. It contains information about the issuer company, its business, management policies, risk involved in this issue, the financial status of the company, and the main reasons why the company is raising money through IPO. These documents are prepared by the company who issues the shares to the public and the Lead Manager of the going public company.

The document is then submitted to SEBI for checking and review. After the document is checked, the SEBI recommends the lead managers to work on the changes so that it can be approved and moved ahead for IPO processing.  The draft document can be found on the website of SEBI in the Reports section. These documents are filed at http://www.sebi.gov.in/SectIndex.jsp?sub_sec_id=70.

Stage 2:  Offer Document

Once the draft Offer document is approved and cleared by SEBI, it is known as Offer Document.  The Offer Document is the modified and upgraded version of the draft Offer document which was submitted to SEBI before making changes. The offer document is later submitted to the stock exchanges and registrar of the issue wherever the Issuer Company is willing to get list.

Stage 3: Red Herring Prospectus

Once the offer document gets approved by the Stock Exchanges, the going public Company add the Issue size and price of the issue to the document so that it can be made available to the public. The issued prospectus is called Red Herring Prospectus.