Question

Initial Public Offer and Further Public Offer

Distinguish between the following:

Initial Public Offer (IPO) and Further Public Offer (FPO)

Answer 1

Basis	Initial Public Offer	Further Public Offer
Meaning:	IPO refers to an offer of securities by an unlisted Public Company to the public for the first time.	FPO means an offer of securities by a listed Public Company to the public to raise subsequent capital.
Type of issuer company:	It is issued by an unlisted Public Company.	It is issued by a listed Public Company.
When issued:	It is usually issued by an existing company that wants to raise capital from the public for the first time.	It is usually issued by a listed Public company when it wants to raise further capital from the public.
Order of issue:	IPO proceeds FPO. An IPO is the first-time sale of shares to the public.	FPO is always done after IPO. FPO is the second or subsequent sale of shares to the public.
Listing:	The company must be listed for the first time before issuing an IPO.	A company making an FPO is already a listed company.
Risk:	It is very risky for the investor, as he cannot predict the company’s performance.	It is less risky for the investor, as he has an idea of the company’s past performance and can judge its future performance.