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IPO & FPO

By

Vikas Gupta 1 Prateek Jhunjhunwala 2

IPO
What is IPO ?

A way of raising capital. Initial public offer by an company which is not listed on stock exchange. Company can be private or public.

Principal steps in IPO

Approval of BoD Appointment of lead managers Filing the prospectus with SEBI Filing the prospectus with registrar of the companies Printing and dispatching of prospectus Filing of initial listing application Promotion of the issue

Steps Contd

Statutory announcement Collections of application Establishing the liability of underwriters Allotment of shares Listing of issue

Advantages of IPO
Why go Public ?

Helps in raising large sum of capital. Boosts up Image of the company.

Helps in tapping wide pool of investors.

The capital raised has never to be repaid.


It helps in mergers and acquisitions. Trading in open market means liquidity. Better transparency.

Major IPOs

Coal India Ltd - Rs 150 billion ( largest in world, 2010 Reliance Power Ltd - Rs 117 billion, 2008 ONGC Rs 95 billion, 2004 DLF Rs 91.88 billion, 2006 Cairn India Rs 57.88 billion, 2006 TCS Rs 54.2 Billion, 2004 Reliance Petroleum- Rs 27 billion, 2006

FPO
What is FPO ?

Issue of shares by a company already listed. Also called secondary offering

It can be done by: Issuing fresh shares Promoters diluting their stake

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