Can You Explain The Concept Of Shelf Prospectus, Deemed Prospectus, Res-herring Prospectus?

Question

Can You Explain The Concept Of Shelf Prospectus, Deemed Prospectus, Res-herring Prospectus?

2 Answers

Answer Question

Answer 1

Shelf prospectus is issued by the banks and finanacial institutions.
When a public company does not issue a prospectus and it issues a notification to the general public, it is called a deemed prospectus.
Red herring prospectus is issued when there is a book building process and quantity and quantum of the shares are not available. Then it is called red herring prospectus.

Answer 2

Red-herring Prospectus :
It means a prospectus which does not have complete details as regards the price at which the securities are being offered and the quantity of securities. When the offer of securities gets closed, then the company has to file a final prospectus stating therein the total capital or quantity of securities raised and the price of the securities or any other details which were not given in the red-herring prospectus. This final prospectus, in case of a listed public company, is necessary to be filed with the Securities and Exchange Board of India (SEBI) and the Registrar of Companies but if the company is not a listed one then the company has to file the final prospectus only with the Registrar of companies.