What happens in an FPO?

What happens in an FPO?

In a Follow-on Public Offering (FPO), a company issues additional shares to the public. Here’s what typically happens during an FPO:

1.     Issue Price: The company often sets the issue price for the new shares lower than the current market price. This makes the shares more attractive to potential investors.
2.     Attracting Subscribers: By offering shares at a lower price, the company aims to attract more investors and ensure that the FPO is successful.
3.     Market Impact: When the FPO is announced, the increased supply of shares at a lower price can lead to a drop in the market price of the company’s existing shares. Over time, the market price may adjust and align more closely with the FPO issue price.



    • Related Articles

    • Why does a company need an FPO?

      A company usually conducts a Follow-on Public Offering (FPO) to raise additional capital. This is typically done through a dilutive FPO, where new shares are issued to generate new funds. Here’s why a company might need an FPO: Raise Additional ...

    • Should you subscribe to an FPO?

      Deciding whether to invest in a Follow-on Public Offering (FPO) can be a smart move, especially compared to investing in an Initial Public Offering (IPO). Here’s why: 1. Familiarity with the Company: Unlike an IPO, where the company is new to the ...

    • What is an FPO (Follow-on Public Offering)?

      A Follow-on Public Offering (FPO) is a method by which companies that are already listed on the stock exchange issue additional shares to the public. This is different from an Initial Public Offering (IPO), where a company offers its shares to the ...

    • What happens if the F&O position is not squared off until the end of the session on expiry day?

      If you fail to square off your options positions on the expiry day, the settlement will be based on the exchange's determined price. The difference between the settlement price and your entry prices will be reflected in your trading account ledger. ...

    • What happens if SIP orders doesn't execute?

      If your SIP order isn't executed on the SIP date due to any issues, you can manually retry. Retry Button: A 'Retry' button will be next to your Stock SIP order. Depending on your SIP's frequency, this feature will be available for a few days. After ...