Follow-on Public Offer (FPO)

What are the types of FPO?

There are two different types which a company can conduct Follow on Public Offer (FPO):

1) Dilutive FPO

2) Non-Dilutive FPO

Dilutive FPO

In dilutive FPO, the company issue additional number of shares but the price value of the company’s share does not change and remains the same. These overall decreases reduction in earnings per share as well as the share price.

Here, the company’s board releases new share offerings to the public. However, an FPO is used by a company only to reduce the debt or to raise additional capital of the company.

Non-Dilutive FPO

Non-Dilutive FPO means the shareholders of the company sell their private shares to the public. Here the money directly goes to the individual offering and not to the company.

Thus, the per-share earnings of the company does not get affected.