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.



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