Around ten to twelve companies filed draft red herring prospectuses with SEBI on September 29 and 30, signalling sustained primary market momentum heading into the fourth quarter. The filings span sectors including manufacturing, services, and technology. Companies file DRHPs to seek SEBI approval before launching public share sales. SEBI typically has thirty working days to issue observations on a DRHP, after which the company has twelve months to proceed with the offering.

An Initial Public Offering is the process by which a private company raises capital from the public by issuing shares listed on a recognized stock exchange. In India, the process is governed by SEBI's Issue of Capital and Disclosure Requirements (ICDR) Regulations, 2018.

The journey begins when a company files a Draft Red Herring Prospectus (DRHP) with SEBI. The DRHP contains detailed disclosures about the company's financials, risk factors, objects of the issue (how proceeds will be used), and the promoter background. SEBI scrutinizes the document and issues its 'observations' — essentially a clearance letter — within 30 working days for book-built issues.

Once SEBI observations are received, the company has a 12-month validity window to open the IPO. The final offer price and issue size are disclosed in the Red Herring Prospectus (RHP) filed just before the issue opens.

IPOs can involve a fresh issue of shares (company gets the money) or an offer for sale (existing shareholders sell their stake; company gets nothing). Many Indian IPOs combine both. SEBI mandates minimum public shareholding of 25% post-listing for most companies.

The primary market — where securities are first sold to investors — is distinct from the secondary market where listed shares are subsequently traded. Sustained DRHP filing activity is a leading indicator of primary market health and investor confidence in equity valuations.