FPO ( Follow On Public Offer)
Follow On Public Offer(FPO)
Follow on Public Offer is a process in which an existing company listed on the stock exchange issue new shares to the existing shareholders or to the new investors.
There are two different types which a company can conduct Follow on Public Offer (FPO):
Dilutive FPO –
Dilutive FPO is when the company wants to release more shares to collect more funds. This is done to pay off the debts. However, in the case of a dilutive FPO, a company’s value remains unchanged, which results in a decrease in the per-share earnings 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.