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A DRHP is a draft disclosure document, not a verdict on whether an IPO is a good investment. To read one usefully, first confirm you have the latest version, then examine the company’s financial trends, borrowing obligations, risk factors and proposed use of fresh-issue proceeds. Treat figures and plans as issuer disclosures for the periods and offer described—not as forecasts or completed actions.
How to confirm you have the right DRHP
Begin with the cover: check the issuer name, document date and type of offer. Then check the filing category and status. SEBI’s Public Issues filing index distinguishes draft offer documents filed with SEBI from red-herring documents filed with the Registrar of Companies (ROC). A draft may be revised, so figures copied from an earlier version may no longer match the latest document.
The date matters in practice: a SEBI-hosted SRIT India Limited DRHP dated January 29, 2026, says it will be updated upon filing with the ROC. It is an example of why readers should verify the document’s date and status before relying on its figures, not a source for general conclusions about IPOs. Compare the version you are reading with any later filing available for that offer.
How to assess revenue in a DRHP
Compare the periods and the right revenue line
Use the audited or restated financial statements included in the filing and compare the periods they present. Separate revenue from operations from other income before assessing the trend; the two lines describe different sources of income. Consider growth alongside margins rather than treating a higher revenue figure alone as evidence of stronger performance.
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Check concentration and consistency
Look for disclosures about dependence on a small number of customers, products, business lines, geographies or contracts. Compare those disclosures with the business description and risk factors. Ask whether the financial trend is consistent with the company’s account of how it operates, and note where the filing does not quantify an exposure.
These figures describe historical results for the periods shown. They are not a forecast of future revenue, and an example issuer filing does not establish a typical revenue trend across companies.
How to read debt and financing risk
A headline borrowing figure is only one part of the picture. Read borrowings with the cost and terms of servicing them, and compare the obligations with the company’s operating cash generation.
- Record current and non-current borrowings.
- Check interest expense and any disclosed repayment schedule.
- Note whether borrowings are secured or supported by guarantees.
- Review contingent liabilities where disclosed.
- Find any proposed repayment or prepayment of debt using fresh-issue proceeds.
Then compare those obligations with the financial statements and the relevant risk-factor discussion. A planned debt repayment may reduce a disclosed liability if carried out, but a proposal in a draft does not establish that the repayment has happened or that the business has low financial risk.
How to make sense of risk factors
Read the full risk-factor section, not just a summary or a short list. Prioritize each material disclosure by its possible effect on sales, costs, cash flows, operating permissions or the company’s ability to carry out its stated business plan. Where the filing quantifies an exposure, note the amount and context; where it does not, keep the exposure explicitly unquantified.
Issuer prospectus language hosted by SEBI cautions that some risks may be unknown and that risks currently believed to be immaterial could arise or become material. That wording is a warning about uncertainty, not an assurance that every possible risk has been identified. Prospectus language also advises investors to read risk factors carefully and rely on their own examination of the company and offer, including the risks involved.
Do not read a filing as SEBI endorsement of an IPO. The cited prospectus wording says the securities have not been recommended or approved by SEBI and that SEBI does not guarantee the document’s accuracy or adequacy.
Where IPO money goes: fresh issue versus offer for sale
Separate the fresh issue from the offer-for-sale (OFS) portion before interpreting the total offer size. In a fresh issue, the company issues new shares and receives the proceeds. In an OFS, existing shareholders sell their shares; that portion is not new capital raised by the issuer. Check who is selling and how many existing shares are offered.
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For the fresh issue, find the objects of the offer and compare each proposed use with its stated amount, timing and the net proceeds. Note any funding gap or use whose amount or timing is less specific. A stated use is a plan, not proof that the money has already been spent.
For example, the SRIT India Limited draft cited here discloses a 25% cap of gross proceeds for unidentified acquisitions and other strategic initiatives. That figure is specific to that issuer’s disclosed offer; it is not a general rule or regulatory threshold.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to compare two IPOs or DRHP versions
Use the same questions for each issuer or version, and rely on the relevant filing for issuer-specific values:
- Revenue quality and concentration: what drives revenue, and how dependent is the company on particular customers, products, geographies or contracts?
- Leverage and repayment: what are the borrowings, interest burden and repayment profile?
- Risk disclosures: how specific are the risks, and what business or cash-flow effects could they have?
- Offer mix: how much is a fresh issue and how much is an OFS?
- Use of fresh proceeds: how clear are the proposed uses, amounts and execution timing?
- Document status: which version is being compared, and what is its date and filing status?
These axes help organize a comparison; they do not by themselves rank an IPO or establish whether it is attractive.
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