Follow On Public Offer (FPO)

List of Current/Upcoming Follow On Public Offers

Company Issue Dates Issue Price Market Lot Issue Size Shares on Offer
Ruchi Soya 24 Mar - 28 Mar Rs.615-650 21 Rs.4300
Yes Bank 15/07 - 17/07 Rs.12-13 1000 Rs.15,000.00 Cr
ITI 24/01 - 28/01 Rs.72-77 Rs. 180,000,000
Madhav Copper 27/01 - 30/01 Rs.100 - 102 1200 Rs.25.50 2,499,600

What is Follow On Public Offer (FPO)?

FPO (Follow on Public Offer) is a process by which a company, which is already listed on an exchange, issues new shares to the investors or the existing shareholders, usually the promoters. FPO is used by companies to diversify their equity base.

A company uses FPO after it has gone through the process of an IPO and decides to make more of its shares available to the public or to raise capital to expand or pay off debt.

A follow-on public offering (FPO) is the issuance of shares to investors by a company listed on a stock exchange. A follow-on offering is an issuance of additional shares made by a company after an initial public offering (IPO). However, follow-on offerings are different than secondary offerings.

A follow-on public offer (FPO) is another issuance of shares after the initial public offering (IPO).

Companies usually announce FPOs to raise equity or reduce debt.

The two main types of FPOs are dilutive—meaning new shares are added—and non-dilutive—meaning existing private shares are sold publicly.

An at-the-market offering (ATM) is a type of FPO by which a company can offer secondary public shares on any given day, usually depending on the prevailing market price, to raise capital.

Public companies can also take advantage of an FPO through an offer document. FPOs should not be confused with IPOs, the initial public offering of equity to the public. FPOs are additional issues made after a company is established on an exchange.

Types of Follow-On Public Offers

There are two main types of follow-on public offers. The first is dilutive to investors, as the company’s Board of Directors agrees to increase the share float level or the number of shares available. This kind of follow-on public offering seeks to raise money to reduce debt or expand the business. Resulting in an increase in the number of shares outstanding.

The other type of follow-on public offer is non-dilutive. This approach is useful when directors or substantial shareholders sell-off privately held shares. With a non-dilutive offer, all shares sold are already in existence. Commonly referred to as a secondary market offering, there is no benefit to the company or current shareholders. By paying attention to the identity of the sellers on offerings, an investor can determine whether the offering will be dilutive or non-dilutive to their holdings.

At-the-Market Offering (ATM)

An at-the-market (ATM) offering gives the issuing company the ability to raise capital as needed. If the company is not satisfied with the available price of shares on a given day, it can refrain from offering shares. ATM offerings are sometimes referred to as controlled equity distributions because of their ability to sell shares into the secondary trading market at the current prevailing price.