Are you excited to get additional information regarding the difference between IPO and FPO?
| IPO (Initial Public Offering) | FPO (Follow-on Public Offering) |
| IPO’s full form is Initial Public Offering. | FPO full form is Follow-on Public Offering. |
| In this process, the private company first-time offers its shares to the public. | In this process, the already listed company offers more shares to the public. |
| The IPO launching purpose could be Capital generation, growth, Debt reduction, investment for business, and many more. | The FPO’s launching purpose could be to make more money, reduce debt, and improve liquidity. |
| Since the private company has no trading history, an IPO can be risky. | Since FPOs are issued by companies that are already public, they have lower risk because these companies already have a trading history. |
| The IPO price band can be decided through book-building or a fixed price. | Generally, the FPO price band can be stable or lower. |
| In an IPO, investors have to trust on financial documents to invest. | In FPO, investors can check the history, financial documents, and trading moments to invest money. |
| Regulated by SEBI/stock exchange for public listing. | Also regulated, but rules differ for already listed companies. |
| Fundraising size can be very large, depending on valuation and investor interest. | Usually smaller compared to an IPO, depending on the requirement for additional capital. |
In summary, IPOs and FPOs both give investors a chance to grow their money, but in different ways. However, investors should always research regarding particular company’s financial statements, promoters’ holdings, PE and PB ratios, EBITDA margin, and many more financial points.
IPO vs FPO, both are satisfactory with the deep analysis, so we suggest investors first do accurate research and apply.
