Follow-on Public Offer
Also called: FPO · Topic: Financial Markets, Instruments, Insurance and Pensions · NCERT: Beyond NCERT
Meaning
A Follow-on Public Offer (FPO) is a public issue of new shares by a company that is already listed on a stock exchange. The company uses it to raise more capital after its IPO. The new money goes to the company.
Example
Adani Enterprises withdrew its FPO in January-February 2023, even though it was fully subscribed. This followed the Hindenburg report on the Adani group.
Don't confuse with
- Initial Public Offering (IPO): a company's first sale of shares to the public, after which it gets listed. An FPO comes after listing.
- Offer for Sale (OFS): promoters or the government sell their existing shares through the exchange, so no new money reaches the company. It is the main route for disinvestment.
Related concepts
- Primary market
- Initial Public Offering
- Red herring prospectus
- Book building
- Anchor investor
- Qualified Institutional Buyer
- Application Supported by Blocked Amount
- Green shoe option
- Underwriting
- Grey market premium