|
BASIS |
IPO |
FPO |
|
Meaning |
An IPO refers to “Initial Public Offering,” in which a private corporation offers share to the public for the very first time in a public issuance |
FPO is the process of issuance of the share to the investors by the company already listed on the stock exchange. |
|
Full form |
Initial Public Offer |
Follow-on-Public Offer |
|
Issuer |
Unlisted Company |
Listed Company |
|
Several issues. |
IPO is the first public issue of the company |
FPO is the second or third issue of the company. |
|
Objective |
Money raised through IPO used to fund expansion plans. |
The purpose of the FPO is to diversify the equity, raise additional capital for the company, and pay off debt. |
|
Risk |
IPOs considered riskier as the investor is unknown, and the future of the company is uncertain. |
In FPO, the investor already has an idea about the company’s investment and growth prospects. |
|
Profit |
Higher the Risk, Higher the return. The profits earned by IPOs are relatively higher than the FPOs |
Thought to be Lower than IPO |
