Follow-on Public Offer (FPO)

What is Follow-on Public Offer (FPO)?

A Follow-on Public Offer (FPO) is a type of public offer in which an existing company listed on the stock exchange issue new shares to the existing shareholders or to the new investors.

It is different from an IPO where the company issue its shares to its public for the first time to collect funds in order to grow their business.

The reason behind the company performing an FPO is to expand its equity base. The company uses FPO only after the company has started the process of an IPO to make their shares available to the public and to raise capital for their business.

The FPO can be raised for many reasons like, financial expansion, paying off debt, or funding acquisition.