Scaling New Heights Through Follow-On Public Offers
For listed entities that have achieved substantial growth and enjoying investor confidence, tapping markets again through Follow-On Public Offers (FPO) represents an efficient mechanism for raising expansion capital or providing exits.
- Evaluating growth financing needs and ideal quantum in context of firm's appetite
- Structuring appropriate FPO size aligned to free float market cap
- Drafting offer documents articulating investment rationale, risk factors etc.
- Navigating regulatory approvals process across stock exchanges and SEBI
- Anchor book management ahead of public opening through institutional demand aggregation
- Attractively pricing FPO to ensure optimal subscription levels
- Listing support for freshly minted shares on the exchanges
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FAQs of FPO
An FPO is the issuance of additional shares by a company already listed on the stock exchanges to the public through an offer document and prospectus.
The key steps are appointing intermediaries, filing a draft offer document with SEBI and stock exchanges, undertaking marketing, allowing bidding, finalizing basis of allotment, enabling listing and trading of newly issued shares.
Key FPO eligibility norms are prior three years of profitable operations, positive net worth, no pending regulatory actions, and minimum average market cap of Rs 100 crores in preceding year.
SEBI mandates a minimum fund raise of Rs 10 crores through the FPO route. Generally, FPOs range from Rs 100-500 crore and more.
The entire FPO process from appointment of intermediaries to listing of shares takes around 4-6 months in most cases.
