FPO vs IPO

IPO is Initial Public Offering and FPO is Follow-up Public Offering. IPO comes first to Follow-up Public Offering as an FPO can only be given if there is an initial public offering.

IPOs are more profitable than FPOs. A company makes an IPO for compiling money and an FPO for adding to the initial public offerings.

Initial Public Offering is the first sale whereas the Follow-up Public Offering is the second sale for expanding businesses.

IPOs are risky investments as an individual investor cannot predict what will happen to the initial trading in the coming days. But in the case of FPOs, the risk is lower as an investor already has an idea about the investment and future growth of the company.

An Initial Public Offering is considered to be a period of transitory growth and so there is a certain uncertainty regarding the future.

A company brings out an FPO for further growth. If a company is coming out with an FPO, it also means that the company is short of funds. FPO is raised for more funds or money or for establishing new projects. FPOs can be of two types – dilutive and non-dilutive. In a dilutive FPO, the board of directors of a company agrees to increase the shares by selling more equity. A non-dilutive FPO means selling privately held shares of the directors or insiders of a company.

In IPO and FPO, the company never repays the capital but gives the shareholders a right to future profits of the company.

Summary:

1.IPO is Initial Public Offering and FPO is Follow-up Public Offering.
2.A company makes an IPO for compiling money and an FPO for adding to the initial public offerings.
3.If a company is coming out with an FPO, it also means that the company is short of funds. An FPO is raised for more funds or money or for establishing new projects.
4.Initial Public Offering is the first sale whereas the Follow-up Public Offering is the second sale for expanding businesses.
5.IPOs are risky investments as an individual investor cannot predict what will happen to the initial trading in the coming days.
6.In the case of FPOs, the risk is lower as an investor already has an idea about the investment and future growth of the company.
7.Initial Public Offerings are more profitable than Follow up Public Offerings.

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