Now not only read, but also see and hear all about IPOs

Before applying for a company’s IPO (Initial Public Offering), do you check the necessary details related to it? Or do you simply apply based on the advice of a friend or colleague? If the reason for not checking the details is that you don’t have time to read the Draft Red Herring Prospectus (DRHP), or you find it boring, then there is good news for you. The stock market regulator SEBI has issued a new mandate. Companies launching IPOs will now have to provide a 10-minute audio-video disclosure. This disclosure must contain all necessary information related to the company. This way, you can easily learn about the company, the features of its IPO, etc., without having to research separately.

In fact, it is advisable to know the necessary details about a company before applying for its IPO. Until now, people used to read the company’s Draft Red Herring Prospectus (DRHP) for this purpose. The DRHP is a document that a company files with SEBI before launching an IPO. This document includes essential details about the company and information about what the company plans to do with the money raised from the share sale. It also mentions potential risks for investors.

The mandatory AV (audio-video) disclosure will make it easier for investors. AV disclosure means that all necessary details about the company will be provided in audio and video format. This way, investors can view all the essential information about the company in video format.

According to SEBI, in this AV content, investors must also be informed that this is the sole source of information related to the company, and they should not pay attention to any other documents, content, or information present on social media or any other platform. SEBI mentioned in one of its circulars that this change has been made based on the feedback from various stakeholders.

Along with this, the advertisements for the DRHP (Draft Red Herring Prospectus), RHP (Red Herring Prospectus), and Price Band will also be in AV format. The AV must provide information about the company’s business, promoters, management, financial details, pending legal cases, risks, and all other information that is typically included in the DRHP.

These videos can be viewed on the website and social media channels of the company launching the IPO, as well as on the website of the Association of Investment Bankers of India (AIBI). The videos can also be accessed through the QR codes provided along with the offer documents.

Initially, these videos will be made available in two languages: Hindi and English. For companies filing DRHPs on or after July 1, this will be voluntary, while for companies filing DRHPs on or after October 1, it will be mandatory.