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FOLLOW ON PUBLIC OFFER

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Sundar B N
Sundar B N

Follow on public offer Meaning Types of FPO Diluted FPO Non - diluted FPO At - the market offering Benefits Advantages of FPO.

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TOPIC:- FOLLOW ON PUBLIC OFFER Presented by :- Lakshmi m 1st m com Govt first grade women collage Holenarasipura
. FOLLOW ON PUBLIC OFFERS INTRODUCTION :- Companies require capital regularly to fund various business activities such as expansion, paying off debt etc. business owners often seek external capital as they cannot keep funding the business through personal savings. When a company increases, requiring them to raise funds through the general public. Although business owners can raise initial funds through an initial public offering(IPO). What happens when the company needs additional funds this is where a follow-on public offer(FPO) helps business owners to ensure they have adequate funds to keep their business activities running smoothly
Meaning of follow on public offers The follow on public offering are common in the investment world . They provide an easy wav for companies to raise equity that can be used for common purposes. Companies announcing secondary offerings may see their share price fall as a result. An FPO can be a good option for compaies that have already established a track record of success and have a strong following of investors willing to buy additional shares. However, FPOS can also dilute the ownership and earnings per share of existing share of existing share holders , which investors consider before participating in an FPO. Generally, companies issue FPOS to raise additional funds for various reasons plans , paying off debt, or funding acquisitions. The FPO process is similar to an IPO, requiring issuers to draft an offering document and allot shares to investors before listig them on the stock exchange.
Types of FPO  diluted fololw on offering  Non diluted follow on offering  At the market (ATM) offering
1. Diluted follow on public offer Diluted follow-on offerings happen when a company issues additional shares to raise funding and offer those shares to the public market . As the number of shares increase, the earnings per share decrease. The funds raised during an FPO are most frequently allocated to reduce debt or change a company’s capital structure. The infusion of cash is good for the long term out look of the company, and thus, is also good for its shares.
2. Non diluted follow on offering non- diluted follow on offerings happen when holders of existing, privately held shares bring previously issued shares to the public market for sale. Can proceeds from non diluted sales go directly to the share holders placing the stock into the open market . In many cases, these share holders are company founders, members of the board of directors, or pre- ipo investors. Since no new shares are issued, the company’s EPS remains unchanged non- diluted follow on offerings are also called secondary market offerings.
3. At-the-market(ATM) offering An at-the-market (ATM) offering gives the issuing company the ability to raise capital as needed. If the company is not satisfied with the available price of shares on a given day, it can refrain from offering shares. ATM offerings are some times referred to as controlled equity distribution because of their ability to sell shares into the secondary trading market at the current prevailing price
benefits of follow on public offers  Capital raising: one of the primary reasons companies launch an FPO is to raise additional capital for the company the companies can use these funds to pay off debt or invest in expansion  Increased liquidity: FPO increase the liquidity of the company’s shares by increasing the number of shares available in the market. This market it easier for investors to but and sell shares in the company .  Diversification: an FPO allows companies to diversify its investors base as new investors buy their shares. It also result in diversifying the equity base of the company.  Improved market reputation : a successful FPO can improve a company’s market reputation, as it demonstrates investor’s confidence in the company growth potential and financial stability
. Advantages of FPO • It helps in raising additional capital for an organization or company • The FPO scheme increases the liquidity of the company as it allows the latter to make available more shares for issuance . • The companies get an opportunity to diversify their investor base by making available an additional scheme to issue shares. • When more investor in a company increase, it indicates better growth and performance of the entity hence, the company becomes a well –reputed market entity

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FOLLOW ON PUBLIC OFFER

  • 1. TOPIC:- FOLLOW ON PUBLIC OFFER Presented by :- Lakshmi m 1st m com Govt first grade women collage Holenarasipura
  • 2. . FOLLOW ON PUBLIC OFFERS INTRODUCTION :- Companies require capital regularly to fund various business activities such as expansion, paying off debt etc. business owners often seek external capital as they cannot keep funding the business through personal savings. When a company increases, requiring them to raise funds through the general public. Although business owners can raise initial funds through an initial public offering(IPO). What happens when the company needs additional funds this is where a follow-on public offer(FPO) helps business owners to ensure they have adequate funds to keep their business activities running smoothly
  • 3. Meaning of follow on public offers The follow on public offering are common in the investment world . They provide an easy wav for companies to raise equity that can be used for common purposes. Companies announcing secondary offerings may see their share price fall as a result. An FPO can be a good option for compaies that have already established a track record of success and have a strong following of investors willing to buy additional shares. However, FPOS can also dilute the ownership and earnings per share of existing share of existing share holders , which investors consider before participating in an FPO. Generally, companies issue FPOS to raise additional funds for various reasons plans , paying off debt, or funding acquisitions. The FPO process is similar to an IPO, requiring issuers to draft an offering document and allot shares to investors before listig them on the stock exchange.
  • 4. Types of FPO  diluted fololw on offering  Non diluted follow on offering  At the market (ATM) offering
  • 5. 1. Diluted follow on public offer Diluted follow-on offerings happen when a company issues additional shares to raise funding and offer those shares to the public market . As the number of shares increase, the earnings per share decrease. The funds raised during an FPO are most frequently allocated to reduce debt or change a company’s capital structure. The infusion of cash is good for the long term out look of the company, and thus, is also good for its shares.
  • 6. 2. Non diluted follow on offering non- diluted follow on offerings happen when holders of existing, privately held shares bring previously issued shares to the public market for sale. Can proceeds from non diluted sales go directly to the share holders placing the stock into the open market . In many cases, these share holders are company founders, members of the board of directors, or pre- ipo investors. Since no new shares are issued, the company’s EPS remains unchanged non- diluted follow on offerings are also called secondary market offerings.
  • 7. 3. At-the-market(ATM) offering An at-the-market (ATM) offering gives the issuing company the ability to raise capital as needed. If the company is not satisfied with the available price of shares on a given day, it can refrain from offering shares. ATM offerings are some times referred to as controlled equity distribution because of their ability to sell shares into the secondary trading market at the current prevailing price
  • 8. benefits of follow on public offers  Capital raising: one of the primary reasons companies launch an FPO is to raise additional capital for the company the companies can use these funds to pay off debt or invest in expansion  Increased liquidity: FPO increase the liquidity of the company’s shares by increasing the number of shares available in the market. This market it easier for investors to but and sell shares in the company .  Diversification: an FPO allows companies to diversify its investors base as new investors buy their shares. It also result in diversifying the equity base of the company.  Improved market reputation : a successful FPO can improve a company’s market reputation, as it demonstrates investor’s confidence in the company growth potential and financial stability
  • 9. . Advantages of FPO • It helps in raising additional capital for an organization or company • The FPO scheme increases the liquidity of the company as it allows the latter to make available more shares for issuance . • The companies get an opportunity to diversify their investor base by making available an additional scheme to issue shares. • When more investor in a company increase, it indicates better growth and performance of the entity hence, the company becomes a well –reputed market entity