{"id":2778,"date":"2023-02-06T02:29:33","date_gmt":"2023-02-05T20:59:33","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=2778"},"modified":"2025-03-26T00:13:48","modified_gmt":"2025-03-25T18:43:48","slug":"what-is-follow-on-public-offer-fpo","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/what-is-follow-on-public-offer-fpo\/","title":{"rendered":"What is Follow on Public Offer (FPO)?"},"content":{"rendered":"<h2>About Follow on Public Offer (FPO):<\/h2>\n<ul>\n<li><strong>What is it?<\/strong> FPO is a process wherein a <strong>company already listed on a stock exchange issues new shares to existing investors or shareholders<\/strong>.<\/li>\n<li>It is also known as a <strong>secondary offering.\u00a0<\/strong><\/li>\n<li><strong>Purpose<\/strong>:\u00a0\u00a0<\/li>\n<li>FPO allows a company to <strong>raise additional funds<\/strong> through the issuance of new shares.\u00a0<\/li>\n<li>Companies use FPOs to <strong>diversify their equity base and raise capital<\/strong> for business.\u00a0<\/li>\n<li>This capital can be <strong>used for multiple purposes<\/strong>, such as to meet the <strong>company&#8217;s expenses, business expansion, debt reduction<\/strong>, etc.<\/li>\n<li><strong>Types of FPO:<\/strong><\/li>\n<li><strong>Dilutive FPO:<\/strong><\/li>\n<li>It is when a <strong>company issues additional shares and offers them to the public.<\/strong><\/li>\n<li>It <strong>increases the number of outstanding shares<\/strong> of the company.<\/li>\n<li>As the number of shares increase, the <strong>earnings per share (EPS) decrease.<\/strong><\/li>\n<li>Funds raised from such an FPO are allocated for <strong>expansion activities or to pay debts.<\/strong><\/li>\n<li><strong>Non-dilutive FPO:\u00a0<\/strong><\/li>\n<li>It is when <strong>shares that are already in existence are issued to the public.<\/strong><\/li>\n<li>It is when existing <strong>shareholders<\/strong>, like directors or founders, <strong>sell their shares and offer them to the public.<\/strong><\/li>\n<li>Non-dilutive FPOs are <strong>used to change the shareholding ownership.<\/strong><\/li>\n<li><strong>At-the-market offering:<\/strong><\/li>\n<li>It is a type of FPO in which a <strong>company offers secondary public shares on any given day<\/strong> to raise capital, mostly <strong>depending on the prevailing market price.<\/strong><\/li>\n<li>An at-the-market (ATM) offering gives the issuing company the <strong>ability to raise capital as needed.<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3>What is Initial Public Offer (IPO)?<\/h3>\n<ul>\n<li>When a <strong>private company first sells shares of stock to the public<\/strong>, this process is known as an initial public offering (IPO).\u00a0<\/li>\n<li>An IPO means that a <strong>company&#8217;s ownership is transitioning from private ownership to public ownership.<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<hr \/>\n<h3>Q1) What is Rights issue?<\/h3>\n<p>A rights issue is an invitation to existing shareholders to purchase additional new shares in the company. In a rights offering, each shareholder receives the right to purchase a pro-rata allocation of additional shares at a specific price and within a specific period\u00a0<\/p>\n<p><strong>Source:\u00a0 <\/strong><a href=\"https:\/\/www.thehindu.com\/business\/markets\/explained-what-made-the-adani-group-call-off-its-fpo\/article66472096.ece\" target=\"_blank\" rel=\"nofollow noopener\"><u>Explained | What made the Adani Group call off its FPO?<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>FPO is a process wherein a company already listed on a stock exchange issues new shares.<\/p>\n","protected":false},"author":5,"featured_media":2779,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-2778","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/2778","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=2778"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/2778\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/2779"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=2778"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=2778"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=2778"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}