{"id":25655154,"date":"2026-07-27T14:59:52","date_gmt":"2026-07-27T09:29:52","guid":{"rendered":"https:\/\/entri.app\/blog\/?p=25655154"},"modified":"2026-07-27T14:59:52","modified_gmt":"2026-07-27T09:29:52","slug":"what-is-fpo","status":"publish","type":"post","link":"https:\/\/entri.app\/blog\/what-is-fpo\/","title":{"rendered":"What is FPO: Definition and How it Works"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a673c592aa32\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a673c592aa32\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/entri.app\/blog\/what-is-fpo\/#Key_Takeaways\" >Key Takeaways<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/entri.app\/blog\/what-is-fpo\/#What_is_FPO\" >What is FPO?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/entri.app\/blog\/what-is-fpo\/#Why_do_Companies_Issue_an_FPO\" >Why do Companies Issue an FPO?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/entri.app\/blog\/what-is-fpo\/#Types_of_FPOs\" >Types of FPOs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/entri.app\/blog\/what-is-fpo\/#How_does_an_FPO_Work_The_Process_Step-by-Step\" >How does an FPO Work? The Process Step-by-Step<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/entri.app\/blog\/what-is-fpo\/#IPO_vs_FPO_Key_Differences\" >IPO vs. FPO: Key Differences<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/entri.app\/blog\/what-is-fpo\/#Top_Advantages_and_Risks_of_Investing_in_an_FPO\" >Top Advantages and Risks of Investing in an FPO<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/entri.app\/blog\/what-is-fpo\/#How_to_Apply_for_an_FPO_in_India\" >How to Apply for an FPO in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/entri.app\/blog\/what-is-fpo\/#Should_You_Invest_in_an_FPO\" >Should You Invest in an FPO?<\/a><\/li><\/ul><\/nav><\/div>\n<p>Do you follow the Indian stock market closely? Then probably you might have come across terms such as IPO quite often. An Initial Public Offering (IPO) grabs the headlines whenever a new startup decides to go public.<\/p>\n<p>However, companies often need more capital long after their initial stock market debut. This is where a Follow-on Public Offering comes into the picture. For a retail investor looking to build a balanced portfolio in the Indian share market, it is essential to understand <strong>what FPO is<\/strong> and how it functions.<\/p>\n<p style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/course\/stock-market-course\/\" target=\"_blank\" rel=\"noopener\"><strong>Learn Stock Marketing with a Share Trading Expert! Explore Here!<\/strong><\/a><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Key_Takeaways\"><\/span><strong>Key Takeaways<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li>Already listed &#8211; A Follow-on Public Offering (FPO) is when a company already listed on the stock exchange issues new shares to existing shareholders or the general public.<\/li>\n<li>Currently trading &#8211; Unlike an Initial Public Offering (IPO), an FPO happens after the company\u2019s shares are already trading in the stock market.<\/li>\n<li>Objectives &#8211; Companies use FPOs primarily to raise extra capital, clear existing debt, or reduce promoter holding to meet regulatory rules.<\/li>\n<li>Two types &#8211; Investors can choose between two main types of FPOs: Dilutive and Non-Dilutive.<\/li>\n<li>Less risky &#8211; FPOs are generally considered less risky than IPOs because investors already have historical data, financial track records, and stock performance to evaluate.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"What_is_FPO\"><\/span><strong>What is FPO?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>To answer <strong>what is FPO<\/strong> simply: an FPO, Follow-on Public Offering in full form, is a process where an already listed public company issues additional shares to the market.<\/p>\n<p>Whenever a company wants to raise capital for the first time from the general public, it launches an IPO. On the completion of the IPO, the company\u2019s shares start trading on major stock exchanges like the National Stock Exchange (NSE) or the Bombay Stock Exchange (BSE).<\/p>\n<p>However, post the IPO, growth does not come to an end. Several years down the line, the company might decide it needs more funds. It may be for expanding its operations, building new factories, or paying off pending loans. Instead of opting for a high-interest bank loan, the company can choose to issue more shares to the public. This secondary issuance of stock by a listed entity is known as an FPO.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Why_do_Companies_Issue_an_FPO\"><\/span><strong>Why do Companies Issue an FPO?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-25655159 \" src=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/4949448_19725-scaled-e1785144402675.webp\" alt=\"FPO\" width=\"500\" height=\"399\" srcset=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/4949448_19725-scaled-e1785144402675.webp 2556w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/4949448_19725-scaled-e1785144402675-300x239.webp 300w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/4949448_19725-scaled-e1785144402675-1024x817.webp 1024w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/4949448_19725-scaled-e1785144402675-768x613.webp 768w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/4949448_19725-scaled-e1785144402675-1536x1226.webp 1536w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/4949448_19725-scaled-e1785144402675-2048x1635.webp 2048w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/4949448_19725-scaled-e1785144402675-150x120.webp 150w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/4949448_19725-scaled-e1785144402675-750x599.webp 750w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/4949448_19725-scaled-e1785144402675-1140x910.webp 1140w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/p>\n<p>Raising equity capital is one of the most effective ways for a business to fund its future goals. Here are the primary reasons why listed Indian companies opt for an FPO:<\/p>\n<h3><strong>1. Business Expansion and Growth<\/strong><\/h3>\n<p>Companies are constantly in search of opportunities to scale. The reasons may vary starting from setting up new manufacturing plants, entering overseas markets, or investing heavily in research and development.<\/p>\n<p>An example is <a href=\"https:\/\/www.moneycontrol.com\/news\/business\/ipo\/vodafone-idea-fpo-10-things-to-know-about-indias-largest-follow-on-public-offer-12645431.html\" target=\"_blank\" rel=\"noopener\">Vodafone Idea FPO<\/a> launched in 2024 April. The company\u2019s plan was to utilize the proceeds of this FPO for expanding its network infrastructure by establishing new 4G sites, capacity expansion of existing 4G sites and setting up new 5G sites.<\/p>\n<p>From the FPO, Vodafone Idea raised Rs.18,000 crore, the largest by an Indian company at that point of time. An FPO provides a large pool of capital without adding a debt burden to the balance sheet.<\/p>\n<h3><strong>2. Debt Reduction<\/strong><\/h3>\n<p>High corporate debt can eat away at a company&#8217;s profit margins through massive interest payments. Many Indian businesses use the funds raised through an FPO to clear their outstanding loans. Investors and credit rating agencies often find a debt-free or low-debt company more attractive.<\/p>\n<p>Reeling under a debt of Rs.12,000, <a href=\"https:\/\/upstox.com\/market-talk\/ruchi-soya-fpo-all-you-need-to-know\/\">Ruchi Soya<\/a> launched a Rs 4,300 crore follow-on public offer (FPO) in 2022 March. The objective was to reduce debt and to dilute the promoter\u2019s stake in order to be in line with the market regulator\u2019s norms.<\/p>\n<h3><strong>3. Compliance with SEBI Regulations<\/strong><\/h3>\n<p>In the case of listed companies, the Securities and Exchange Board of India (SEBI) mandates minimum public shareholding rules. As per these guidelines, promoters must maintain a minimum percentage of public float (usually 25%).<\/p>\n<p>If a promoter holds too much stake, the company may issue an FPO to dilute the promoter\u2019s holding and meet SEBI&#8217;s compliance standards. Yes Bank launched a Follow-on Public Offer (FPO) in <a href=\"https:\/\/indianexpress.com\/article\/explained\/why-yes-bank-is-launching-an-fpo-6502142\/\" target=\"_blank\" rel=\"noopener\">2020 July<\/a>. The purpose was to raise Rs 15,000 crore to boost its capital levels in compliance with regulatory norms.<\/p>\n<h3><strong>4. Strategic Acquisitions<\/strong><\/h3>\n<p>Whenever a business wants to acquire a competitor or merge with another firm, it needs a good amount of liquidity. In such situations, an FPO allows the company to raise the cash required for strategic mergers and acquisitions quickly.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Types_of_FPOs\"><\/span><strong>Types of FPOs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Not all FPOs are created equal. When asking <strong>what an FPO is<\/strong> and how it impacts your holdings, you must understand the two primary types: Dilutive FPOs and Non-Dilutive FPOs.<\/p>\n<table>\n<tbody>\n<tr>\n<td colspan=\"2\"><strong>Types of FPOs<\/strong><\/td>\n<\/tr>\n<tr>\n<td><strong>Dilutive FPO\u00a0<\/strong><\/td>\n<td><strong>Non-Dilutive FPO\u00a0<\/strong><\/td>\n<\/tr>\n<tr>\n<td>New shares created<\/td>\n<td>Existing shares resold<\/td>\n<\/tr>\n<tr>\n<td>Total pool expands<\/td>\n<td>Total pool remains same<\/td>\n<\/tr>\n<tr>\n<td>EPS decreases<\/td>\n<td>EPS stays stable<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><strong>Dilutive FPO<\/strong><\/h3>\n<p>In a dilutive FPO, the company\u2019s board approves the creation and issuance of brand-new shares. Since new shares are added to the market, the total number of outstanding shares increases.<\/p>\n<p>Because the total pool of shares expands while the company\u2019s overall earnings remain the same in the short term, the Earnings Per Share (EPS) drops. This reduction is known as share dilution. Existing shareholders will hold a slightly smaller percentage of the overall company unless they purchase additional shares in the offer.<\/p>\n<h3><strong>Non-Dilutive FPO<\/strong><\/h3>\n<p>In a non-dilutive FPO, no new shares are created. Instead, existing holders of large blocks of shares\u2014such as company founders, promoters, or private equity investors\u2014sell their holding directly to the public.<\/p>\n<p>Since no new shares enter the market, the total number of outstanding shares remains unchanged. As a result, the company\u2019s Earnings Per Share (EPS) is not diluted. This is also commonly referred to as an Offer for Sale (OFS).<\/p>\n<div class=\"lead-gen-block\"><a href=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/04\/Program-in-Indian-Stock-Market-and-Forex-Trading-1-compressed.pdf\" data-url=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/04\/Program-in-Indian-Stock-Market-and-Forex-Trading-1-compressed.pdf\" class=\"lead-pdf-download\" data-id=\"25556854\">\n<p style=\"text-align: center;\"><button class=\"btn btn-default\">free download Stock market course roadmap<\/button><\/p>\n<\/a><\/div>\n<h2><span class=\"ez-toc-section\" id=\"How_does_an_FPO_Work_The_Process_Step-by-Step\"><\/span><strong>How does an FPO Work? The Process Step-by-Step<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-25655160 \" src=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/28695003-scaled-e1785144456970.webp\" alt=\"FPO\" width=\"410\" height=\"288\" srcset=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/28695003-scaled-e1785144456970.webp 2560w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/28695003-scaled-e1785144456970-300x211.webp 300w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/28695003-scaled-e1785144456970-1024x720.webp 1024w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/28695003-scaled-e1785144456970-768x540.webp 768w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/28695003-scaled-e1785144456970-1536x1080.webp 1536w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/28695003-scaled-e1785144456970-2048x1440.webp 2048w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/28695003-scaled-e1785144456970-150x105.webp 150w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/28695003-scaled-e1785144456970-750x527.webp 750w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/28695003-scaled-e1785144456970-1140x802.webp 1140w\" sizes=\"auto, (max-width: 410px) 100vw, 410px\" \/><\/p>\n<p>Launching an FPO requires strict adherence to corporate governance and regulatory checks. Here is a simplified look at how an FPO moves from board approval to final share allotment:<\/p>\n<h3><strong>1st Step: Board Approval<\/strong><\/h3>\n<p>The company\u2019s board of directors meets to discuss funding requirements. If they decide an FPO is the best route, they pass a board resolution and seek approval from existing shareholders.<\/p>\n<h3><strong>2nd Step: Appointing Merchant Bankers<\/strong><\/h3>\n<p>The company hires merchant bankers, investment banks, and legal advisors to manage the entire process. Merchant bankers help determine the issue price, draft the offer document, and handle regulatory approvals.<\/p>\n<h3><strong>3rd Step: Filing the Draft Red Herring Prospectus (DRHP)<\/strong><\/h3>\n<p>The company files a DRHP with SEBI. This prospectus contains comprehensive financial reports, the purpose of the issue, risks involved, and promoter background. SEBI reviews the document to ensure full transparency for retail investors.<\/p>\n<h3><strong>4th Step: Marketing and Pricing<\/strong><\/h3>\n<p>The company promotes the issue through roadshows and investor meets. FPOs can be offered in two ways:<\/p>\n<ul>\n<li><strong>Fixed Price Issue:<\/strong> The company sets a fixed price per share.<\/li>\n<li><strong>Book Building Issue:<\/strong> The company provides a price band (e.g., \u20b9200 to \u20b9215), and investors bid within that range.<\/li>\n<\/ul>\n<h3><strong>5th Step: Bidding and Allotment<\/strong><\/h3>\n<p>The FPO opens for subscription over a set window, usually 3 to 5 trading days. Retail investors apply using ASBA (Application Supported by Blocked Amount) through their bank or broker. Once bidding closes, shares are allotted, and refunded amounts (if unallotted) are unblocked in bank accounts.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"IPO_vs_FPO_Key_Differences\"><\/span><strong>IPO vs. FPO: Key Differences<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Understanding <strong>what FPO is<\/strong> becomes much clearer when you contrast it with an IPO.<\/p>\n<table>\n<tbody>\n<tr>\n<td><strong>Parameter<\/strong><\/td>\n<td><strong>IPO (Initial Public Offering)<\/strong><\/td>\n<td><strong>FPO (Follow-on Public Offering)<\/strong><\/td>\n<\/tr>\n<tr>\n<td><strong>Company Stage<\/strong><\/td>\n<td>Unlisted company going public for the first time.<\/td>\n<td>Already listed public company.<\/td>\n<\/tr>\n<tr>\n<td><strong>Risk Level<\/strong><\/td>\n<td>Higher risk due to limited public track record.<\/td>\n<td>Lower risk as historical data is available.<\/td>\n<\/tr>\n<tr>\n<td><strong>Purpose<\/strong><\/td>\n<td>To list on stock exchanges and raise initial equity.<\/td>\n<td>To raise additional funds or reduce promoter stake.<\/td>\n<\/tr>\n<tr>\n<td><strong>Pricing<\/strong><\/td>\n<td>Often harder to value due to lack of market history.<\/td>\n<td>Priced typically at a discount to current market price.<\/td>\n<\/tr>\n<tr>\n<td><strong>Information<\/strong><\/td>\n<td>Limited to historical financials in prospectus.<\/td>\n<td>Extensive public record, quarterly reports, and trading trends.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><span class=\"ez-toc-section\" id=\"Top_Advantages_and_Risks_of_Investing_in_an_FPO\"><\/span><strong>Top Advantages and Risks of Investing in an FPO<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-25655161 \" src=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/2148780624.webp\" alt=\"FPO\" width=\"468\" height=\"312\" srcset=\"https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/2148780624.webp 1500w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/2148780624-300x200.webp 300w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/2148780624-1024x683.webp 1024w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/2148780624-768x512.webp 768w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/2148780624-150x100.webp 150w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/2148780624-750x500.webp 750w, https:\/\/entri.app\/blog\/wp-content\/uploads\/2026\/07\/2148780624-1140x760.webp 1140w\" sizes=\"auto, (max-width: 468px) 100vw, 468px\" \/><\/p>\n<p>Before you invest your hard-earned money, it is an imperative to compare the potential rewards against the risks involved.<\/p>\n<h3><strong>Advantages of FPOs<\/strong><\/h3>\n<ol>\n<li><strong>Discounted Pricing:<\/strong> In order to attract investors, companies often price their FPO shares at a slight discount compared to the prevailing market price on the stock exchange.<\/li>\n<li><strong>Proven Track Record:<\/strong> When compared to an IPO where you rely heavily on projections, an FPO offers years of published financial statements, quarterly earnings, and dividend histories.<\/li>\n<li><strong>Higher Transparency:<\/strong> Listed companies are subject to rigorous SEBI regulations. This makes operational information easily accessible to retail investors.<\/li>\n<\/ol>\n<h3><strong>Risks of FPOs<\/strong><\/h3>\n<ol>\n<li><strong>Market Volatility:<\/strong> As stock prices fluctuate daily, if the overall market crashes during the FPO window, the share price might drop below the FPO issue price.<\/li>\n<li><strong>Share Dilution:<\/strong> Dilutive FPOs increase total shares, which can temporarily push down the stock&#8217;s Earnings Per Share (EPS) and market price.<\/li>\n<li><strong>Reason for Raising Capital:<\/strong> If a company issues an FPO simply to service bad debt with no clear plan for profitable growth, it could be a sign of underlying operational weakness.<\/li>\n<\/ol>\n<h2><span class=\"ez-toc-section\" id=\"How_to_Apply_for_an_FPO_in_India\"><\/span><strong>How to Apply for an FPO in India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Applying for an FPO in India is straightforward and follows a process very similar to applying for an IPO:<\/p>\n<ol>\n<li><strong>Active Demat Account:<\/strong> Make sure that you have an active Demat and Trading account with a registered Indian broker.<\/li>\n<li><strong>Access IPO\/FPO Section:<\/strong> Log in to your broker&#8217;s app or web portal and go to the &#8220;Bids&#8221;, &#8220;IPO&#8221;, or &#8220;FPO&#8221; section.<\/li>\n<li><strong>Select the Issue:<\/strong> Choose the active FPO you want to apply for from the list.<\/li>\n<li><strong>Enter Bid Details:<\/strong> Select the quantity (in lots) and specify your bid price (or select the Cut-Off price).<\/li>\n<li><strong>UPI Authorization:<\/strong> Key in your UPI ID and submit the application. Open your UPI app to approve the funds mandate.<\/li>\n<li><strong>Confirmation:<\/strong> Once approved, the funds will be blocked in your bank account until the allotment process is completed.<\/li>\n<\/ol>\n<p style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/course\/stock-market-course\/\" target=\"_blank\" rel=\"noopener\"><strong>Learn Stock Marketing with a Share Trading Expert! Explore Here!<\/strong><\/a><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Should_You_Invest_in_an_FPO\"><\/span><strong>Should You Invest in an FPO?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>An FPO can present a great opportunity to buy shares of a well-established business. That too at a prospective discount. However, a discount alone should never be the only criteria to invest.<\/p>\n<p>Before placing your bid, check the reasons why the business needs additional cash. Find out whether the capital is meant for launching new products, expanding infrastructure, or paying off long-term debts. If it boils down to healthy growth, it may be worth considering that FPO.<\/p>\n<p>On the other hand, if the funds are being used to cover recurring operational losses, it is better to exercise caution. Always review the company&#8217;s balance sheet, read the prospectus, and consult a qualified financial advisor before allocating capital.<\/p>\n<div class=\"alert alert-warning\"><strong>Disclaimer:<\/strong> The information provided in this article is for general informational purposes only and is not intended as investment advice, financial guidance, or an offer or solicitation to buy or sell any securities. Readers should conduct their own research or consult a qualified financial advisor before making any investment decisions. The author(s) and the publisher disclaim any liability for any loss or damage arising directly or indirectly from the use of or reliance on the information provided herein.<\/div>\n<div>\n<table>\n<tbody>\n<tr>\n<td colspan=\"2\">\n<p style=\"text-align: center;\"><b>RELATED POSTS<\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/blog\/manipal-health-ipo\/\" target=\"_blank\" rel=\"noopener\"><b>Manipal Health IPO: Latest News, Date, Price, GMP, Valuation, And Should You Invest?<\/b><\/a><b>\u00a0<\/b><\/td>\n<td style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/blog\/silverstorm-parks-and-resorts-ipo\/\" target=\"_blank\" rel=\"noopener\"><b>Silverstorm Parks &amp; Resorts IPO: Latest News, Date, Price, GMP, Valuation, And Should You Invest?<\/b><\/a><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/blog\/indian-gas-exchange-ipo\/\" target=\"_blank\" rel=\"noopener\"><b>Indian Gas Exchange (IGX) files for IPO papers with SEBI<\/b><\/a><\/td>\n<td style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/blog\/open-ai-ipo\/\" target=\"_blank\" rel=\"noopener\"><b>OpenAI IPO: Everything Investors Need to Know in 2026<\/b><\/a><b>\u00a0<\/b><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/blog\/zepto-share-price\/\" target=\"_blank\" rel=\"noopener\"><b>Zepto IPO: Date, Price, GMP, Valuation, And Should You Invest?<\/b><\/a><b>\u00a0<\/b><\/td>\n<td>\n<p style=\"text-align: center;\"><a href=\"https:\/\/entri.app\/blog\/reliance-jio-share-price\/\" target=\"_blank\" rel=\"noopener\"><b>Reliance Jio IPO: Latest News, Date, Price, GMP, Valuation, And Should You Invest?<\/b><\/a><b>\u00a0<\/b><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div class=\"modal\" id=\"modal25556854\"><div class=\"modal-content\"><span class=\"close-button\">&times;<\/span>\n<div>\n<div class=\"wpcf7 no-js\" id=\"wpcf7-f25556854-o1\" lang=\"en-US\" dir=\"ltr\" 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class=\"wpcf7-form-control wpcf7-hidden course-name-input\" value=\"\" type=\"hidden\" name=\"course_name\" \/>\n<input class=\"wpcf7-form-control wpcf7-hidden utm-source\" value=\"\" type=\"hidden\" name=\"utm_source\" \/>\n<input class=\"wpcf7-form-control wpcf7-hidden utm-medium\" value=\"\" type=\"hidden\" name=\"utm_medium\" \/>\n<input class=\"wpcf7-form-control wpcf7-hidden utm-campaign\" value=\"\" type=\"hidden\" name=\"utm_campaign\" \/>\n<input class=\"wpcf7-form-control wpcf7-hidden utm-content\" value=\"\" type=\"hidden\" name=\"utm_content\" \/>\n<input class=\"wpcf7-form-control wpcf7-hidden utm-term\" value=\"\" type=\"hidden\" name=\"utm_term\" \/>\n<input class=\"wpcf7-form-control wpcf7-hidden blog-url\" value=\"\" type=\"hidden\" name=\"blog_url\" \/>\n<input class=\"wpcf7-form-control wpcf7-hidden post-category-name\" value=\"\" type=\"hidden\" name=\"post_category_name\" \/>\n<input class=\"wpcf7-form-control wpcf7-hidden post-author-name\" value=\"\" 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<script>document.addEventListener(\"DOMContentLoaded\",function(){document.querySelectorAll('.wpcf7-form').forEach(function(e){e.addEventListener('submit',function(){if(document.getElementById('cf-turnstile-cf7-295124484')){setTimeout(function(){turnstile.reset('#cf-turnstile-cf7-295124484');},1000)}})})});<\/script> <\/div><br\/><input class=\"wpcf7-form-control wpcf7-submit has-spinner\" type=\"submit\" value=\"Submit\" \/>\n<\/p><div class=\"wpcf7-response-output\" aria-hidden=\"true\"><\/div>\n<\/form>\n<\/div>\n\n<\/div><\/div><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Do you follow the Indian stock market closely? Then probably you might have come across terms such as IPO quite often. An Initial Public Offering (IPO) grabs the headlines whenever a new startup decides to go public. However, companies often need more capital long after their initial stock market debut. This is where a Follow-on [&hellip;]<\/p>\n","protected":false},"author":137,"featured_media":25655155,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[802,1867],"tags":[],"class_list":["post-25655154","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","category-stock-marketing"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What is FPO: Definition and How it Works<\/title>\n<meta name=\"description\" content=\"Being a stock market enthusiast, do you know what FPO is? 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