Follow-on Public Offer
A public issue of shares by a company that is already listed, made after its initial public offering.
How it is identified
Test: the issuer is already listed and is offering further shares to the public at large
Unit
qualitative
In depth
An FPO differs from an IPO only in that a market price already exists, which anchors the pricing and gives investors a reference the IPO buyer never has. Like an IPO, it can be a fresh issue, an offer for sale, or both, and the fresh-issue portion dilutes existing shareholders. Investors often confuse an FPO with a rights issue: an FPO is open to the public, while a rights issue is offered only to existing shareholders in proportion to their holdings. FPOs are frequently priced at a discount to the market to ensure subscription, which pulls the traded price down toward the offer.
Worked example
A listed share trades at ₹220 and the company launches an FPO at ₹200, a discount of 20 / 220 = 9.1%. The market price typically drifts toward the offer price during the issue, since nobody pays ₹220 for what is available at ₹200.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Follow-on Public Offer” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.