IPO vs FPO: what's the difference?

Both an IPO and an FPO sell shares to the public, and you apply for both through your broker with UPI or ASBA. The difference is whether the company is already listed.

IPO: the first sale

An initial public offering is the first time a company's shares are offered to the public. Until it lists, there is no market price, so the price band is set by the company and its bankers and demand shows up only in the subscription.

FPO: a follow-on sale

A follow-on public offer is made by a company that is already listed. It can raise new money (new shares) or let existing holders sell (an offer for sale). Because the share already trades, investors can compare the FPO price with the market price, and FPOs are usually priced at a discount to it.

What's the same

Applying, categories (retail, HNI, QIB), lots, UPI mandates and allotment work the same way. Allotment results are checked on the registrar's website in both cases.

Which is riskier?

An IPO has less public history to judge by. An FPO's share price can move between the offer and the allotment, so a discount at launch may shrink by listing day. Neither is safe by default; read the offer document.

Related guides

• Offer for sale (OFS) vs fresh issue in an IPO
• DRHP, RHP and prospectus: what to read before an IPO
• What is book building in an IPO?

More on how ipos work

• IPO lot size, price band and cut-off price explained
• SME IPO vs mainboard IPO: what is different
• IPO categories explained: retail, HNI (NII) and QIB
• Anchor investors in an IPO
• The shareholder quota in an IPO
• IPO lock-in periods explained

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Information, not investment advice. GMP is an unofficial grey-market indicator; figures come from public sources (InvestorGain) and may be late or wrong. Not registered with or affiliated to SEBI, the exchanges, the registrars or InvestorGain.