Full Form of FPO
FPO stands for Follow-on Public Offer. Below are some key details about FPO:
- Definition:
An FPO is a process through which a publicly traded company offers additional shares to investors after its initial public offering (IPO).
Purpose:
- To raise additional capital for the company.
To fund expansion projects, pay off debt, or invest in new ventures.
Types of FPO:
- Dilutive FPO: Involves issuing new shares, which can dilute the existing shareholders’ ownership.
Non-Dilutive FPO: Involves existing shareholders selling their shares, which does not dilute ownership.
Benefits of FPO:
- Access to Capital: Provides companies with a way to raise funds from the public.
- Increased Liquidity: Can improve the liquidity of the company’s shares in the market.
Enhances Visibility: Increases the visibility of the company in the capital markets.
Considerations:
- Investors should assess the reasons behind the FPO and its potential impact on share price and ownership structure.
- Existing shareholders may experience dilution in their ownership percentage if the FPO is dilutive.
Understanding FPO is crucial for both investors and companies looking to navigate the public capital markets effectively.