Q.Initial Public Offer and Further Public Offer

IPO is the first public offer of shares by an unlisted company (leading to listing), while FPO is a later public offer by an already-listed company to raise more funds. Both are ways of raising capital from the public in the primary market.

A public issue means offering shares to the general public through a prospectus. It is the most common way for a company to raise a large amount of share capital. Depending on the company's stage, a public issue takes one of two forms.

Initial Public Offer (IPO): This is the first time an unlisted company offers its shares to the public. Through an IPO the company's shares get listed on a recognised stock exchange and it becomes a listed (public) company. An IPO is used to raise fresh capital for expansion and to give existing promoters/investors a route to sell part of their holding.

Further Public Offer (FPO): Also called a follow-on public offer, this is made by a company whose shares are already listed on a stock exchange. Having gone public earlier, the company issues additional shares to the public to raise further capital for growth, repayment of loans or other needs.

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