Discussion
A prospectus which does not include complete particulars of the quantum or price of the securities is known as ................ .
Answer: A
It is a red herring prospectus.
Section 32 of the Companies Act, 2013 defines a red herring prospectus as one that does not include complete particulars of the quantum or price of the securities offered. It is used in book-building issues, where the price is discovered from bids, and is filed with the Registrar before the issue opens.
A shelf prospectus (section 31) covers several issues over a period, an abridged prospectus is a summary that accompanies application forms, and a deemed prospectus arises when securities are allotted for an offer for sale to the public.
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