When a company files for an IPO in India, SEBI requires the submission of an AV (Audio-Visual) disclosure alongside the Draft Red Herring Prospectus (DRHP). This 10-minute video summarizes key financials, business operations, and risks, providing investors with a clear and concise overview.
The script must strictly follow SEBI’s guidelines to ensure accuracy and compliance. Beyond fulfilling a regulatory requirement, AV disclosure helps investors make informed decisions by presenting complex information in a simple and engaging format.
What is AV Disclosure Mandated by SEBI?
An AV disclosure is a concise video presentation summarizing key details of a company filing for an IPO. It visually presents information from the Draft Red Herring Prospectus (DRHP) and is mandatory under SEBI regulations starting October 1, 2024.
This video acts as a crucial investor communication tool, providing a clear and engaging overview of the company’s business, financials, operations, and risks. It must follow SEBI’s strict guidelines on content structure, language, and duration to ensure accuracy and compliance.
The Process of AV Disclosure and Its Importance
An AV disclosure is a key part of the IPO process, providing investors with a concise yet comprehensive overview of the company. Since the Draft Red Herring Prospectus (DRHP) is extensive, the AV disclosure simplifies key details—financials, operations, risks, and governance—into a structured 10-minute format that is both compliant and investor-friendly.
Beyond regulatory compliance, the AV disclosure improves investor understanding, making complex information clear and engaging. It must be uploaded within 5 working days of filing the DRHP on the Issuer’s website, social media, and AIBI website. If filed under Chapter IIA of SEBI regulations, it must be available within 5 working days of the Updated DRHP (UDRHP).
The video will also be accessible via a QR code in offer documents. Investors should rely only on official sources, as unauthorized content from social media or influencers may not be accurate or compliant.
Key Elements of the AV Disclosure Script
Structure and Content
The script for the AV disclosure video must closely follow the structure of the DRHP document. It should cover, the following:
- Company Overview: A brief introduction to the company, its business, and what it does.
- Financials: A summary of the company’s financial performance, including key metrics like revenue, profit margins, and debt levels.
- Risk Factors: A concise presentation of the major risks the company faces, which can affect its performance and the success of its IPO.
- Use of Proceeds: An explanation of how the funds raised through the IPO will be used.
- Management and Governance: An introduction to key figures in the company, including executives and board members.
- Promoters: An introduction to the company’s promoters and their role.
- Pending Legal Matters: A summary of any ongoing legal matters.
- Capital Structure: Details about the company’s capital structure.
- Litigations: A brief overview of any active litigations.
- Material Developments: Significant developments that have impacted the company’s operations or strategy.
- Terms of the offer: Details about the IPO offering, including the number of shares, price range, and offering period.
- Business operations: An overview of the company’s key business operations, including its main products or services, market position, and operational structure.
- Objectives of the offer: An explanation of the strategic objectives behind the IPO, including how the funds raised will help the company achieve its growth targets, strengthen its market position, or fund other key initiatives.
Compliance with SEBI Guidelines
The AV disclosure script must be written in compliance with SEBI’s prescribed guidelines. This includes a specific format outlined in the AIBI (Association of Investment Banks of India) document.
Writers tasked with drafting the script must have a deep understanding of the DRHP to extract essential details while maintaining accuracy and compliance. The language of the script is primarily in English and Hindi, ensuring that it caters to a wide range of potential investors.
Writers must avoid making unsupported claims or exaggerated statements about the company.
For example:
One cannot claim that the company is “leading” or has “pioneering technology” unless these claims are explicitly mentioned in the DRHP. The tone should remain professional, factual, and direct, ensuring that the AV disclosure remains credible.
How to Write an Effective AV Disclosure Script?
Creating an effective AV disclosure script requires a detailed understanding of the DRHP, as the script should reflect all critical aspects of the document without unnecessary elaboration.
Here are some tips for writing an effective AV disclosure script:
- Stay Factual: The script should avoid any form of boasting. Claims such as being a “market leader” or “innovative” are only valid if supported by concrete evidence within the DRHP.
With the DRHP often running over 500 pages, our writers focused on identifying and condensing key points into a 10-minute script. We consulted with legal professionals to clarify intricate details and ensure the information was represented accurately.
- Be Concise: Since the video is limited to 10 minutes, it’s essential to distill the most crucial points without losing important context.
- Avoid Repetition: The script should present information clearly and engagingly, ensuring there is no redundancy or repetition throughout the video.
- Keep Content Up-to-Date: The AV disclosure should be revised with the most current information at the stage of the Red Herring Prospectus (RHP), as required by SEBI.
An Example of Smart Decision-Making
One of the key challenges in writing an AV disclosure script is making quick decisions under tight deadlines. For example, when tasked with selecting risk factors, the writer had to narrow down over 100 risks.
With the team focused on other aspects of the IPO, our writer used their presence of mind to select the top 5 risks in the order mentioned in the DRHP. This thoughtful decision ensured the disclosure remained concise and focused, addressing the key threats without overwhelming the audience.
It’s a perfect example of how quick thinking and attention to detail play a vital role in crafting an effective AV disclosure.
The entire process required working with several top law firms associated with the client. Each firm had specific insights, and our team aligned with their expectations while accommodating their busy schedules. From late-night reviews to early-morning calls, we ensured approvals were obtained without delays.
The voiceover artist plays an essential role in the success of the AV disclosure video. They should be professional, clear, and articulate, ensuring that every word is easily understood by the viewer. The tone of voice should align with the company’s image and the seriousness of the information being conveyed.
A professional voiceover artist ensures that the content is delivered with the right pacing, emphasis, and clarity. They should have the ability to convey complex financial or technical information in a way that sounds engaging yet authoritative.
We gathered information from multiple lawyers specialising in different areas, from compliance to financial disclosures. The challenge was to integrate these inputs into a seamless narrative that met SEBI’s standards.
By staying detail-oriented and prioritising clear communication, we successfully supported the client in creating a compliant and comprehensive AV disclosure video. This project highlighted the importance of adaptability, precision, and collaboration in managing high-stakes deliverables like AV disclosures.
Editing the IPO Video: Rules and Considerations
Once the script is written and the voiceover recorded, the video needs to be edited. This phase requires a solid understanding of both the technical requirements and creative aspects of the AV disclosure.
- Visuals: The video should feature relevant footage that complements the script. For example, while discussing financial terms, images of the company’s operations or offices can be used as background footage. However, when talking about specific financial data, text overlays and graphs can help convey the information more clearly.
- Background Music: The video should include simple background music that doesn’t overpower the voiceover. The focus should remain on the content, and the music should be subtle, enhancing the viewing experience without distracting the audience.
- Subtitles or Popups: When editing, make sure that key points are highlighted with on-screen text or popups. However, SEBI regulations restrict the inclusion of excessive or irrelevant information in these popups. The content should remain focused on the company and its offerings and within the guidelines of SEBI.
When to Start the AV Disclosure Process
Timing is crucial when preparing for an IPO, and it’s recommended to begin the AV disclosure process at least three months before filing. Starting early allows sufficient time for revisions, approvals, and compliance checks, ensuring alignment with SEBI guidelines and avoiding last-minute complications.
By partnering with a marketing consultancy agency like My Content Cafe, which specializes in SEBI regulations, you can ensure that your AV disclosure is delivered on time, fully compliant, and seamlessly integrated into your IPO strategy. We work closely with your law firm, managing everything from scriptwriting and voiceovers to shooting and editing—ensuring a smooth and efficient process.
What Comes After AV Disclosure? Unlocking New Opportunities
Completing your AV disclosure isn’t the end—it’s the beginning of your growth story. Here’s how you can capitalize on it with the right marketing strategies:
1. Creative Corporate Videos
Repurpose your AV disclosure content into a creative video for public use. It highlights your company’s strengths and works as a powerful tool for showcasing your brand.
How It Helps:
- Attract investors and clients with a professional narrative.
- Strengthen negotiations for large-scale deals.
- Expand your global reach with a polished, shareable video.
2. Social Media Management
A strong social media presence ensures your brand stays in the public eye. Going public is the perfect time to build credibility and engage with a larger audience.
How It Helps:
- Boosts visibility and trust among investors and customers.
- Positions your brand as relevant and approachable.
- Increases awareness, directly influencing brand value.
3. Personal Branding for CXOs
CXO-level leaders are key faces of your company. Building their personal brands helps position them as thought leaders, adding credibility to your organization.
How It Helps:
- Builds trust with investors and the market.
- Attracts partnerships and opportunities by showcasing strong leadership.
- Inspires talent, making your company a desirable workplace.
4. Marketing Consultancy
Tackle your post-IPO marketing challenges with expert B2B and B2C consultancy to optimize strategies and refine your positioning.
How It Helps:
- Aligns marketing goals with business objectives.
- Identifies growth opportunities and drives better results.
- Resolves challenges with tailored strategies.
Conclusion
The AV disclosure is an integral part of the IPO process, offering a concise, transparent overview of the company for potential investors. Preparing a high-quality AV disclosure involves careful planning, an in-depth understanding of the DRHP, and attention to regulatory compliance.
By following SEBI’s guidelines and working with experienced professionals, companies can create an effective AV disclosure that enhances investor confidence and supports a successful IPO launch.
At My Content Cafe, we specialise in creating compliant, professional AV disclosures that meet all regulatory requirements and enhance investor presentations and roadshow materials. We ensure your message resonates with investors and delivers a clear, impactful disclosure.
However, alongside the AV disclosure, a strong marketing strategy is also essential. While focusing on your AV content, it’s important to also develop engaging marketing materials that attract more investors and maximise your visibility.
Whether through corporate video production or other marketing content, we can help you craft a complete strategy that ensures your IPO stands out.
Whether you’re at the beginning or final stages of the IPO process, we can ensure your AV disclosure and marketing materials are aligned, on time, and on target.
