Initial Public Offer (IPO) vs Followon Public Offer (FPO) | UPSC
While IPOs offer a chance for high-growth potential, FPOs might be less risky for investors due to the company's established track record.
Analyzing the price performance of an IPO after the lock-up period can be crucial for gauging investor sentiment compared to an FPO, where the stock price already reflects market evaluation.
Companies may utilize FPOs strategically to raise capital for expansion exactly when they need it, whereas IPOs are typically one-time events for initial funding.
Dilution of ownership through share issuance is a key difference, with IPOs establishing the initial shareholder base and FPOs potentially impacting existing ownership percentages.
The regulatory requirements and marketing efforts involved in an IPO are generally more extensive compared to a subsequent FPO.