Section 32 of the Companies Act, 2013: Red Herring Prospectus

Section 32 of the Companies Act, 2013 permits a company proposing an offer of securities to issue a red herring prospectus before issuing the final prospectus. The section sets out the filing timeline, legal obligations and the information that must be supplied after the offer closes.

Updated: 16 September 2026

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What is a red herring prospectus?

The Explanation to Section 32 defines a red herring prospectus as a prospectus that does not include complete particulars of the quantum or price of the securities included in it. In a public issue, this enables the offer process to proceed before those final particulars are incorporated in the prospectus filed after the offer.

Key point: A red herring prospectus is not exempt from prospectus obligations merely because the final quantum or price particulars are incomplete. Section 32(3) expressly applies the same obligations that apply to a prospectus.

Section 32 requirements explained

1. Issue before the final prospectus - Section 32(1)

A company proposing to make an offer of securities may issue a red herring prospectus before the issue of a prospectus. The provision is enabling: it permits use of the red herring prospectus as part of the offer process, subject to the remaining requirements of Section 32 and other applicable securities laws.

2. Filing with the Registrar - Section 32(2)

The company must file the red herring prospectus with the Registrar of Companies (RoC) at least three days before the opening of the subscription list and the offer.

3. Same obligations as a prospectus - Section 32(3)

The red herring prospectus carries the same obligations as are applicable to a prospectus. Any variation between the red herring prospectus and the prospectus must be highlighted as a variation in the prospectus.

4. Filing after closure of the offer - Section 32(4)

After the offer closes, a prospectus containing the total capital raised, whether by debt or share capital, the closing price of the securities, and other particulars that were not included in the red herring prospectus must be filed with the Registrar and the Securities and Exchange Board of India (SEBI).

Practical sequence for a red herring prospectus

  1. The company prepares the offer document in accordance with the Companies Act, 2013 and, where applicable, the SEBI regulatory framework governing the public issue.
  2. The red herring prospectus is filed with the RoC at least three days before the subscription list and offer open.
  3. The offer is conducted on the basis of the applicable offer documents and securities regulations.
  4. After closure, the final prospectus is completed with the capital raised, closing price and other particulars absent from the red herring prospectus.
  5. The completed prospectus is filed with the RoC and SEBI as required by Section 32(4).

For listed or proposed-to-be-listed public issues, Section 32 operates alongside the applicable SEBI regulations, including the regulatory requirements governing offer documents and public issue filings. SEBI maintains separate public-issue filing categories for draft offer documents, red herring documents filed with the RoC and final offer documents.

Red herring prospectus vs. final prospectus

Red herring prospectus: Issued before the final prospectus and may omit complete particulars of the quantum or price of the securities.

Final prospectus after the offer: Must state the total capital raised, closing price and other details not included in the red herring prospectus, and must be filed with the RoC and SEBI.

Why Section 32 matters

Section 32 creates the statutory bridge between an offer document used before pricing or final issue particulars are complete and the prospectus containing the final offer information. It also preserves prospectus-level obligations and requires differences between the red herring prospectus and the prospectus to be specifically highlighted.

Section 32 should be read with the surrounding provisions governing public offers and prospectuses, including Section 23 - public offer and private placement, Section 26 - matters to be stated in a prospectus, Section 30 - advertisement of prospectus, Section 31 - shelf prospectus, Section 33 - issue of application forms for securities, and the liability provisions in Section 34 and Section 35.

Legal reference: The statutory wording and current regulatory requirements should be checked against the latest official text and applicable SEBI regulations before an actual securities offering or filing.