Initial Public Offering (IPO) is when a hitherto unlisted company makes either a fresh issue of shares or some of its existing shareholders make an offer to sell of part of their eisting shareholding for the first time to the public. This paves the way for the listing and trading of such shares. An IPO of fresh shares is typically made by a company when it needs money for growth expansion or diversification or acquisitions or even to meet its increasing working capital requirements. In an IPO involving an offer for sale the proceeds go to the selling shareholders.
Further Public Offering (FPO) is when an already listed companymakes either a fresh issue of securities to the public or the existing promoters make an offer for sale to the public. An FPO where fresh securities are issued is typically made be a company when it needs money for growth expansion or diversification or acquisitions or even to meet its increasing working capital requirements. An FPO is also the preferred route (over a right issue) when the company wants to bring in new investors both insitutional as well as retail. It may be pointed out that the FPO route is alsobeing utilizes extensively by the Government fot the PSUs for the purpose of disinvestment of government’s holdings.
Grow Wealth Investment 