FPO stands for Follow-on Public Offering, a term used primarily in finance and investment banking. It refers to the process of a company issuing additional stock to the public after its initial public offering (IPO). An IPO is the initial sale of a company's shares to the public, whereas an FPO occurs when a company already listed on a stock exchange decides to offer more shares to the public.
During an FPO, the company typically aims to raise additional capital, either to finance its growth strategies, repay debts, make acquisitions, or for general corporate purposes. The FPO shares are usually priced based on the prevailing market conditions, taking into consideration factors such as demand, company performance, and prevailing economic conditions.
Investors may view FPOs as an opportunity to invest in a company that has already established a track record in the public markets. It provides them with a chance to purchase newly issued shares directly from the company, allowing them to participate in the company's growth or potential increase in share value.
FPOs are subject to regulatory requirements and must adhere to securities laws and exchange regulations. These offerings are typically underwritten by investment banks, who assist in determining the offering price, marketing the shares, and facilitating the purchase process for interested investors.
Overall, an FPO is a process by which a publicly listed company raises additional capital by offering more shares to the public, providing investors with an opportunity to invest in the company's future prospects.
