Why does a company need an FPO?

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 Capital

The primary reason for an FPO is to bring in more money to the company. This additional capital can be used for various purposes, such as:

  • Expansion: To fund growth initiatives, like opening new branches or entering new markets.
  • Debt Repayment: To pay off existing debts and reduce interest expenses.
  • Operational Needs: To cover day-to-day operating expenses or invest in new projects.

 


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