Difference between red herring prospectus and shelf prospectus
Answers
Shelf prospectus - According to the Section 31 of the Companies Act 2013 (Section 60A of the Companies Act 1956), Shelf prospectus is a kind of public offering where the issuers are allowed to offer and sell the securities to the public without the need for a separate prospectus for every offering.
The securities included therein are issued for subscription in 1 or more than one issues over a period of time without the issue of a further prospectus.
Red Herring Prospectus - According to the Section 32 of the Companies Act 2013 (Section 60A of the Companies Act 1956), the Red Herring prospectus is a prospectus that does not give the complete details of the quantum or the securities, like the price of the shares that are being offered, or the number of shares that are being offered, or the amount of the issue.
The Red Herring prospectus is filed by the Registrar and the Securities and Exchange Board of India.