IPO vs FPO
An IPO is a company's first public share offer. An FPO is a further offer by a company that is already listed.
Start the lessonIntroduction
Both are public offers of shares
An IPO (Initial Public Offering) is a company's first public offer of shares, usually before it lists on a stock exchange. An FPO (Further Public Offer, also called a follow-on public offer) is a later public offer by a company that is already listed.
The short answer
IPO: the company enters the public market. FPO: an already-listed company makes another public offer.
The main differences
A simple side-by-side view
The key difference is when the company makes the offer.
Both offers have details, risks, and terms that investors should read in the official offer documents.
Where the money goes
Check if it is a fresh issue or offer for sale
IPO and FPO describe when an offer happens. Fresh issue and offer for sale describe what shares are being sold.
Fresh issue
The company issues new shares. Proceeds from those shares go to the company, after applicable costs, for the purposes described in the offer documents.
Offer for sale
Existing shareholders sell some of their shares. Proceeds go to those shareholders, not to the company.
An IPO or an FPO can include a fresh issue, an offer for sale, or both. Read the offer documents to see which applies.
A simple example
Imagine a company offering shares twice
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First offer
A private company offers shares to the public and lists on an exchange. This is its IPO.
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Later offer
After listing, the company makes another public offer of shares. This is an FPO.
What to keep in mind
Neither offer guarantees a profit
- Applying does not guarantee that you will receive shares.
- A share's market price can rise or fall after it is listed or offered.
- The money raised may go to the company or selling shareholders, depending on the offer.
- Read the offer documents, including the risks and intended use of proceeds.
Key points
What to remember
- An IPO is a company's first public share offer.
- An FPO is a further public offer by an already-listed company.
- Either offer may include new shares, shares sold by existing holders, or both.
- Fresh-issue proceeds go to the company, after applicable costs.
- Offer-for-sale proceeds go to the selling shareholders.
- Allotment and investment returns are not guaranteed.
This lesson is for education only, not personalized financial, tax, or investment advice. Investments in securities are subject to market risks.
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