Definition :- FPO (Follow on Public Offer) is a process by which a company, which is already listed on an exchange, issues new shares to the investors or the existing shareholders, usually the promoters. FPO is used by companies to diversify their equity base.
Description :- A company uses FPO after it has gone through the process of an IPO and decides to make more of its shares available to the public or to raise capital to expand or pay off debt.
Follow On Public Offer :- Public companies can also take advantage of an FPO through an offer document. FPOs should not be confused with IPOs, the initial public offering of equity to the public. FPOs are additional issues made after a company is established on an exchange.
Two Type Of FPO :- There are two main types of follow-on public offers. The first is dilutive to investors, as the company’s Board of Directors agrees to increase the share float level or the number of shares available. This kind of follow-on public offering seeks to raise money to reduce debt or expand the business. Resulting is an increase in the number of shares outstanding.
The other type of follow-on public offer is non-dilutive. This approach is useful when directors or substantial shareholders sell off privately held shares. With a non-dilutive offer, all shares sold are already in existence. Commonly referred to as a secondary market offering, there is no benefit to the company or current shareholders.
The other type of follow-on public offer is non-dilutive. This approach is useful when directors or substantial shareholders sell off privately held shares. With a non-dilutive offer, all shares sold are already in existence. Commonly referred to as a secondary market offering, there is no benefit to the company or current shareholders.
The other type of follow-on public offer is non-dilutive. This approach is useful when directors or substantial shareholders sell off privately held shares. With a non-dilutive offer, all shares sold are already in existence. Commonly referred to as a secondary market offering, there is no benefit to the company or current shareholders.
The other type of follow-on public offer is non-dilutive. This approach is useful when directors or substantial shareholders sell off privately held shares. With a non-dilutive offer, all shares sold are already in existence. Commonly referred to as a secondary market offering, there is no benefit to the company or current shareholders.
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