Optionally convertible debentures are debt securities which allow an issuer to raise capital

and in return the issuer pays interest to the investor till the maturity.
\
The investor of such debentures has a right to convert the debt into equities of the issuing
company at a price which is normally decided at the time of the issue.

IPo
Initial public offering (IPO) or stock market launch is a type of public offering in which shares
of a company are sold to institutional investors[1] and usually also retail (individual) investors; an
IPO is underwritten by one or more investment banks, who also arrange for the shares to be
listed on one or more stock exchanges. Through this process, colloquially known as floating,
or going public, a privately held company is transformed into a public company. Initial public
offerings can be used: to raise new equity capital for the company concerned; to monetize the
investments of private shareholders such as company founders or private equity investors; and
to enable easy trading of existing holdings or future capital raising by becoming publicly traded
enterprises.

The Securities and Exchange Board of India (SEBI) is the regulator for the securities market
in India. It was established in the year 1988 and given statutory powers on 30 January 1992
through the SEBI Act, 1992.[1]

A Draft Red Herring Prospectus, or offer document, is when a company that is planning to raise money from the
public provides detailed information about its business operations and financials. This includes details about its
promoters, reason for raising money, how the money will be used, risks involved with investing in the company
and so on. Investors should bear in mind that it does not provide information about the price or size of the
offering.

2.How do companies prepare a DRHP?

The issuer company approaches a merchant banker to prepare the offer document. Merchant bankers take care
of the legal compliance issues as well ensure that prospective investors are aware and kept in the loop of the
public issue.
The Securities and Exchange Board of India, or Sebi, has made it mandatory for companies to file a DRHP
before going to the Registrar of Companies (RoCs). Sebi reviews the offer document and checks if adequate
disclosures are made. Sebi’s observations or recommendations are given to the merchant banker, who makes
the changes and files the final offer document with Sebi, the ROC) and stock exchanges. Again the document is
reviewed and observations are given to be implemented. Once that is done, f ..

Once that is done, final approval is provided and the document then becomes a RHP (Red Herring Prospectus).

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September 2009: Sahara Prime City files Draft Red Herring Prospectus
(DRHP) with Sebi to bring out an initial public offer of shares to public
investors.
October 2009: Sahara India Real Estate Corporation Ltd. (SIRECL) and
Sahara Housing Investment Corporation Ltd. (SHICL) file Red Herring
Prospectus with Registrar of Companies.
December 2009: Sebi receives complaint from Professional Group for
Investor Protection against SIRECL and SHICL alleging illegal means
used by these two firms in issuance of OFCDs (optionally fully convertible
debentures), to the public throughout the country for many months.
January 2010: Similar complaint received against Sahara group from one
Roshan Lal through National Housing Bank. Sebi seeks clarifications from
the group, initially through their investment bankers Enam Securities and
later directly. Further investigations found that the funds were raised
through OFCDs after filing RHPs (red herring prospectus) with the
Registrar of Companies, although the rules required permission from Sebi
for any issuance of securities to 50 or more investors. In these cases, the
number of investors ran into crores.
November 2010: Sebi passes interim order against the two firms, asking
them to refund the money collected from investors.
June 2011: Sebi passes final order and Sahara challenges these directions
before the Securities Appellate Tribunal.
October 2011: Securities Appellate Tribunal upholds Sebi order and asks
the companies to refund Rs. 25,781 crore to over three crore investors.
August 2012: Sahara moves Supreme Court, which also passes order
asking the two companies to deposit over Rs. 24,000 crore to Sebi for
refund.
December 2012: Supreme Court asks Sahara to deposit the money in three
instalments beginning with an immediate payment of Rs. 5,120 crore.
February 2013: Sebi issues orders to attach bank accounts and other
properties of the group after companies failed to pay remaining two
instalments and later issues summons for personal appearance of Sahara
chief Subrata Roy and other three directors before it.
April 2013: Subrata Roy appears before Sebi after summons.
July 2013: Sebi moves Supreme Court against Sahara group for non-
compliance with the court’s direction November 2013: Subrata Roy barred
from leaving the country.
February 20, 2014: Supreme Court asks Subrata Roy to appear personally.
February 26, 2014: Supreme Court issues non-bailable warrant after
Subrata Roy fails to make personal appearance; Sahara chief cites
mother’s illness for non-appearance.
February 28, 2014: Subrata Roy arrested in Lucknow and sent to police
custody till March 4.