FPO | Business Upturn

How is FPO different from IPO? Explained

Aditya Bhagchandani — Sat, 22 Mar 2025 10:05:58 +0000

When a company raises money from the stock market, it can do so through an Initial Public Offering (IPO) or a Follow-on Public Offer (FPO). While both are methods of raising capital, they are different in purpose, timing, and execution. Here’s a clear and detailed explanation of what IPO and FPO mean, how they differ, and why it matters to investors.

What is an IPO?
An Initial Public Offering (IPO) is the process through which a private company offers its shares to the public for the first time and becomes a listed company on a stock exchange. This allows the company to raise capital by issuing new shares to retail and institutional investors.

Example:
Zomato’s IPO in 2021 marked its debut in the public market, where it offered shares to investors and got listed on both the NSE and BSE.

What is an FPO?
A Follow-on Public Offer (FPO) refers to a listed company issuing additional shares to the public after its IPO. FPOs are typically used to raise more funds for expansion, reduce debt, or meet regulatory capital requirements.

Key differences between IPO and FPO

Feature	IPO (Initial Public Offering)	FPO (Follow-on Public Offer)
Stage	First-time share issuance and listing	Issuance of additional shares post listing
Objective	To raise capital and go public	To raise additional capital from the market
Listing status	Company is unlisted before the IPO	Company is already listed
Risk factor	Higher risk, limited financial history	Comparatively lower risk, track record exists
Price mechanism	Fixed price or book-building	Based on current market price
Regulatory process	Full SEBI approval and listing compliance	Simpler regulatory route compared to IPO

In simple terms:
An IPO is a company’s first step into the stock market, offering shares to the public for the first time. On the other hand, an FPO is when a company already listed on the exchange issues more shares to raise additional capital.

Why it matters:
Understanding the difference between IPOs and FPOs is essential for investors. IPOs often involve more speculation and volatility due to the lack of public financial history. FPOs, however, allow investors to evaluate the company’s past performance before making investment decisions.

This knowledge can help investors make informed decisions based on their risk appetite, investment goals, and the financial standing of the company.

Adani Enterprises FPO subscribed 85% on Day 3, QIB portion booked 97%

Aryan Jakhar — Tue, 31 Jan 2023 09:18:33 +0000

In the afternoon of January 31, the third and last day of bidding, Adani Enterprises received offers for 38.74 million shares against an offer size of 45.5 million shares, reflecting an 85 percent subscription.

This does not include the fully subscribed anchor section.

Retail investors have stepped back as the stock price has fallen below the FPO price band, bidding for only 10% of the shares reserved for them.

QIBs (qualified institutional buyers) are in the fore. They have bid on 12.44 million of the 12.8 million shares allotted to them. This represents a subscription rate of 97 percent.

Non-institutional investors have oversubscribed to the tune of 250 percent of the allotted amount. They bid for 24 million shares, compared to 9.6 million reserved. Meanwhile, employees have bid on 45 percent of the restricted shares.

On January 25, only days before the offer opened, anchor investors, who were among the qualifying institutional purchasers, subscribed for over Rs 6,000 crore in shares. IHC, one of the anchor investors, announced another $400 million investment on January 30 in a statement.

Adani group shares were battered last week when Hindenburg Research, an American short seller, accused the business of utilising tax havens and raised debt worries in a research. Adani Group disputed all claims in a 413-page reply.

The Rs 20,000-crore FPO was 1% subscribed at the conclusion of day one, January 27. The subscription stood at 3% on the second day.

The sale, which runs through January 31, has a price range of Rs 3,112-3,276 per share.

The funds will be used to support projects in the green hydrogen ecosystem, expand current airport facilities, and build new motorways by Adani Group’s flagship enterprise.

The earnings will also be used to repay some debt owed by the business and its subsidiaries (Adani Airport Holding, Adani Road Transport, and Mundra Solar).

Adani Enterprises shares recovered following a steep drop, rising 3.4 percent to Rs 2,976 on the BSE.

Adani Ent’s Rs 20,000 Cr FPO subscribed only 3% on Day 2

News Desk — Mon, 30 Jan 2023 11:51:47 +0000

The ongoing follow-on public offering (FPO) of Adani Enterprises was subscribed only 3% by the end of day 2, data from BSE showed. Adani group’s CFO had however commented that they are confident of the Rs 20,000 crore FPO will sail through successfully.

As of day 2, the QIB portion remained unsubscribed, NII portion was subscribed 4%, Retail portion was subscribed 4% and the portion reserved for employees was subscribed 13%.

However, Abu Dhabi’s IHC in a statement announced that they have invested $400 million in the Adani Enterprises FPO, which is 16% of the overall issue size.

“Our interest in Adani Group is driven by our confidence and belief in the fundamentals of Adani Enterprises Ltd; we see a strong potential for growth from a long-term perspective and added value to our shareholders,” said Syed Basar Shueb, Chief Executive Officer, IHC in a statement

NABARD’s loans jumps 25.2% to reach Rs 6 lakh crore in FY21: Report

News Desk — Sun, 22 Aug 2021 13:21:05 +0000

The Bank in its annual report utters that the total loans and advances extended by NABARD during 2020-21 registered a growth of 25.2 per cent year-on-year to reach Rs 6 lakh crore, with half of it going into production and investment.

The report said NABARD earned Rs 34,671.2 crore income during 2020-21, or a 6.1 per cent increase over the preceding year. Its profit before tax in 2020-21 was Rs 6,081.4 crore, against Rs 5,234.3 crore in the year-ago period. The profit after tax was Rs 4,320 crore compared with Rs 3,859.2 crore in 2019-20.

The National Bank for Agriculture and Rural Development (NABARD) also said its balance sheet size reached Rs 6.57 lakh crore as of March 31, 2021, most of which is on account of non-idle (earning) assets that, in turn, helped create private and public investments at the ground level.

“We achieved a record year-on-year growth of 24 per cent in our total assets and similar impressive growth in the loan portfolio,” NABARD’s Chairman G R Chintala said in the annual report. He noted that because of the government’s Aatmanirbhar Bharat package and hardworking farmers, the agricultural sector recorded a growth of 3.6 per cent last year and is likely to repeat the performance in the current financial year also. Agricultural credit outstanding grew at 12.3 per cent in 2020-21, the highest across all sectors.

“This gives us the confidence to meet the target of Rs 16.5 lakh crore rural credit flow set by the Union Budget 2022, as the monsoon during the current year is also expected to be normal,” Chintala said.

Highlighting deployment of funds and year-on-year growth as of March 2021, the annual report said the total loans and advances from NABARD reached Rs 6 lakh crore compared to Rs 4.8 lakh crore as of March 31, 2020. The growth was 25.2 per cent despite the pandemic compared with 11.5 per cent in 2019-20.

“Encouragingly, half of this total went into production and investments and a third into infrastructure development. With the package unfolding over the coming years, the retail credit offtake in agriculture and rural sector is likely to remain buoyant,” it said.

The report further said the quantum of short-term surplus deployed by NABARD in various financial instruments including deposits with banks stood at Rs 47,740 crore as of March 31, 2021, accounting for 7.3 per cent of the balance sheet.

Out of this, it said 94 per cent was deployed in government securities and other financial instruments, and Rs 2,945 crore was kept in the form of short-term bank deposits to meet liquidity and contingency requirements, as of March 31, 2021.

NABARD said that during 2020-21, it formed about 6.8 lakh self-help groups (SHGs), ensured bank credit for nearly 4 lakh, and released Rs 170.2 crore against a sanction of Rs 418.20 crore for promoting over 8.7 lakh SHGs.

As per the report, the bank promoted 634 farmer producer organisations (FPOs) during the fiscal ending March 2021 against the target of 600. In 2019-20, the government had announced a scheme to develop 10,000 FPOs in five years. As one of the implementing agencies, NABARD targeted the promotion of about 4,000 FPOs within the scheme period. A credit guarantee fund of Rs 1,000 crore with equal share from the central government and NABARD was set up under NABSanrakshan, a NABARD subsidiary, to incentivise banks to finance FPOs.

SEBI approves Patanjali-owned Ruchi Soya’s application to launch FPO

Vandana Nampoothiri — Mon, 16 Aug 2021 06:35:24 +0000

Market regulator Security and Exchange Board of India (SEBI) approved Patanjali-owned Ruchi Soya’s application to launch Rs. 4300 crore Follow-on Public Offer (FPO), sources told MoneyControl.

Ruchi Soya may launch the FPO next week. The company had filed draft documents in June to Rs, 4300 crores.

As reported by MoneyControl, 60 per cent of the FPO will be used mainly to pare Ruchi Soya’s debt, while 20 per cent will be used for working capital and another 20 per cent for general corporate use.

According to Securities Contract (Regulation) Rules, 1957, a listed entity should have a public shareholding of a minimum of 25 per cent. The FPO is launched to meet this requirement by SEBI.

Under this rule, promoters of the company are expected to dilute 9 per cent of their stake in the company. Patanjali holds a 98.90 per cent stake in the company.

According to MoneyControl, the company has time till December 2022 to dilute the promoter’s stake to 75 per cent.

Ruchi Soya is an edible oil company that was acquired by Patanjali through an insolvency process of Rs 4350 crores. Ruchi Soya primarily operates in the business of processing oilseeds, refining crude edible oil for use as cooking oil, as well as manufacturing soya products and value-added products.

The company has brands such as Ruchi Gold, Sunrich, and Nutrela under its name.