Initial Public offer
14th July, 2021 Economy
- Zomato IPO is coming to market for raising the funds.
Means of raising fund in the primary market
Initial Public Offer (IPO)
- Initial Public Offer is the process of offering its new securities to the public/ investor for the first time through the issue of prospectus.
- It is issued only by the unlisted company (a company whose shares are not traded on a stock exchange).
Follow on Public Offer (FPO)
- Follow on Public Offer (FPO) refers to the process where already listed company offers its securities to the public/investor to an offer for sale.
- A follow-on offering is the issuance of additional shares made by a company after an initial public offering (IPO).
- It is also called as the secondary offering.
- A listed company offers its new securities only to the existing shareholders in proportion to their existing shareholding.
- In the Right Issue, shares are issued at a discount.
- Under this, a listed company offers its new securities only to a selected class of shareholders.
- Bonus shares or issues are additional shares given to the existing shareholders without any additional cost, in the proportion of their shareholding in lieu of distribution of dividend.
- Raising capital by selling the share to a select group of investors, or individual.
- The advantage of the private placement is saving in marketing expenses.
- Under this, number of investors who are issued shares cannot be more than 50.
• Under this, the share is allotted to top management