What is FPO? How is it different from an IPO? How to get back the money invested in Adani’s FPO?
Adani 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. It has been in discussion since the announcement of bringing the FPO of Adani Enterprises.
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 information 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.
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 existing shareholders or investors. This 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 claims 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 to expand themselves. 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 an IPO. Whereas, additional claims 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 the money
invested in Adani Enterprises FPO The company will automatically refund the money to the investors who have invested in the FPO of Adani Enterprises. The investor does not need to do anything for this. However, to avoid any hassle, you must preserve the receipt of your FPO. 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 percent. Bidding of 4.55 crore shares was to be done under the FPO. In which bids were received for 4.62 crore shares.
