Thursday, February 2nd, 2023

It was fine till IPO, now what is this FPO? Adani Group going to offer


Photo:India TV It was fine till IPO, now what is this FPO?

FPO Adani Group Offer: If you have a little knowledge about the Indian stock market, then you must have heard about the IPO. Tell me, IPO is brought by a company when it gets its approval from SEBI, but what is FPO? When is it brought? Why has Adani Group suddenly announced to bring FPO? This is a new question which is in discussion nowadays. Exactly 29 years ago in 1994, when the group’s first IPO came, every rupee invested in Adani Enterprises has grown at a CAGR of 37%, while the Indian stock market has grown at a mere 10% CAGR during the same period. Now the company is going to bring FPO.

This is the right time for FPO

Adani Enterprises has said that the FPO is being brought at the very right time. This is part of the group’s 10-year capital planning which is in line with the company’s Fully Funded and De-Risked Growth Plan. The main objective of the company is to increase the stake of Indian retail investors in the company. Through this FPO, participation of every Indian in the golden journey of the company will be possible. Our policy is to remain a socially responsible company along with being a profitable company. Due to this policy, we have been included in the Dow Jones Sustainability Emerging Market Index due to the good performance of our various companies in the field of ESG, and it is a matter of pride that we are the only company from India to be included in this index.

What is FPO

When a listed company issues further securities to the public, it is said to make a follow-on public offer (FPO). The listed company does this to raise additional equity capital to meet the company’s need for expansion or further dilution of promoter holding. These are known as Diluting Offer and Non-Diluting Offer. In the case of a Diluting Offer, the money raised does not change the value of the company, which means that the earnings per share of the company go down.

In case of non-dilutive offering, the capital raised goes to the founders or large shareholders of the company and not to the company itself, which means that the earnings per share of the company remain unaffected. In March 2021, Ashapuri Gold Ornament Ltd had launched an FPO with an offer price of Rs 81 between March 3 and 8, 2021. FPO is mostly a step towards expanding the operations of the company.

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