Thursday, March 28th, 2024

What is FPO? How is it different from IPO? How to get back the money invested in Adani’s FPO?


Highlights:

Through FPO, a company already listed in the Indian markets issues new shares.
These stocks are different from the shares present in the stock market.
Funds are raised from the market through IPO and FPO.

New Delhi. FPOs have been in discussion for the last several days between the announcement by the Adani Group to bring its company Adani Enterprises’ Follow on Public Offer ie FPO and the announcement of its withdrawal. On 27 January 2023, Adani Enterprises released it to raise 20 thousand crores. The FPO of Adani Enterprises was fully subscribed. But, now the company has decided to withdraw it in the meeting of its board of directors. The company has said that the money invested by the investors in the FPO will be returned to them.

In the meeting of the Board of Directors of the company, it has been decided not to go ahead with the FPO up to Rs 20,000 crore in the interest of the customers. The company said in its exchange filing that the fully subscribed FPO is now being stopped here. The company has said that in view of the unprecedented situation and current market volatility, the company aims to protect the interest of its investment community by refunding the FPO proceeds and taking back the completed transactions.

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What is FPO?
Follow-on Public Offer (FPO) is a process through which a company already listed in the Indian markets issues new shares to the existing shareholders or investors. Means the company which is already listed in the stock market, offers new shares to the investors. These are different from the stocks present in the market. Generally, most of the shares are issued by the promoters. FPO is used to diversify the equity base of the company. Once listed, if new shares are to be issued, then FPO is used in that case. The company brings FPO for new share capital raising or to pay off its debt.

Difference between IPO and FPO?
Companies raise funds from the market through IPO or FPO for their expansion. This fund is used to meet the needs of cash flow or to grow the business. For the first time, the company launches its shares in the market through IPO. At the same time, additional shares are brought to the market in FPO. There is a fixed price for the sale of shares in an IPO, which is called the price band. At the same time, at the time of FPO, the price band of the shares is kept lower than the price of the shares present in the market.

How to get money invested in Adani Enterprises FPO
The investors who have invested money in the FPO of Adani Enterprises, when will it return the money to the investors. The money will be returned to the investors account. Investors will not have to do anything to get the money back. Let us tell you that the FPO of Adani Enterprises got a very good response. By the third day, the issue was fully subscribed and received a subscription of 1.02 per cent. Bidding of 4.55 crore shares was to be done under the FPO. In which bids were received for 4.62 crore shares.

Tags: Adani Group, business news in hindi, IPO, stock market

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