Updated on March 5, 2023
While making an investment decision in an IPO, the key document to be referred to is its prospectus. There are many types of prospectus to be issued by the company. An Abridged Prospectus is one among them.
An Abridged Prospectus as per section 2(1) of the Companies Act 2013 is a memorandum or the snapshot showcasing a brief version of the prospectus to be issued by the company at the time of launching an IPO. This document contains all the key highlights of the IPO as per SEBI regulations. This document makes it easier for investors to review the company before taking an investment decision.
Important points about Abridged Prospectus
Some of the key points to note about Abridged Prospectus are:
The abridged prospectus is to be mandatorily filed by the company with the Registrar containing all the key information about the company’s IPO :
a. As per section 33(1), the abridged prospectus is to be included with the application form and all the documents required for the purchase of the company’s securities
b. Since it contains brief details of the company and the IPO, the cost of the public issue of capital is reduced.
c. The company is liable to pay a penalty of Rs. 50,000 if it fails to issue the abridged prospectus for every such default.
d. This document has to be less than 5 pages and should contain all the relevant details of the IPO and the company in the exact order of the prospectus.
e. A company is not required to issue an abridged prospectus if the issue is not made to the general public or if there is a receipt of a bonafide invitation of getting into an underwriting agreement