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Explainer: What is confidential IPO filing, and how is it different from regular DRHP?
3 min read | Updated on March 24, 2025, 07:04 IST
SUMMARY
Some companies prefer confidential IPO filings to protect their sensitive data, such as financials and market strategies, safeguard their interests, and enhance due diligence.
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What is a confidential IPO filing?
'Pre-filing' or DRHP via confidential route is an optional mechanism for issuers seeking to launch a mainboard initial public offer (IPO). Market regulator Securities and Exchange Board of India (SEBI) enabled this option in December 2022. The confidential filing contains all details and disclosures as currently needed for the filing of DRHP, but the only difference is that details are not made public.
Some companies prefer confidential IPO filings to protect their sensitive data, such as financials and market strategies, safeguard their interests, and enhance due diligence.
The confidential filing makes the IPO paper available to the public after the firm files an updated DRHP after SEBI issues its observations on DRHP.
If the companies prefer the regular DRHP route, they can market their initial public offer whenever they need. However, in confidential filing, the company can market their offer after updated DRHP is filed.
SEBI provides an 18-month period to launch an IPO for companies that choose the pre-filing route, unlike those preferring the traditional method, which has a 12-month timeline.
Confidential IPO filing is a new concept in India, but is a common practice in countries like the United Kingdom, the United States, and Canada.
How is confidential pre-filing different from regular DRHP?
| Sr No | Regular DRHP | Confidential Pre-filing |
|---|---|---|
| 1 | DRHP is filed with SEBI and the document is available in the public domain | The pre-filing draft IPO paper is submitted with SEBI but the document is not available in the public domain |
| 2 | Receiving SEBI's observation | Receiving SEBI's observation |
| 3 | Filing updated DRHP with SEBI, but the details are not shared in the public domain | Filing updated DRHP, and details are accessible to everyone |
| 4 | Marketing is allowed from the date the company's Board approves IPO plans | Marketing is allowed after filing the updated DRHP |
| 5 | Filing RHP with Registrar of Companies (RoC) and SEBI | Filing RHP with RoC and SEBI |
| 6 | Issue opening, issue closure | Issue opening, issue closure |
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