{"id":7666,"date":"2025-07-11T10:22:46","date_gmt":"2025-07-11T10:22:46","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/?post_type=glossary&#038;p=7666"},"modified":"2025-07-11T10:22:49","modified_gmt":"2025-07-11T10:22:49","slug":"ipo-vs-fpo","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/ipo-vs-fpo\/","title":{"rendered":"IPO vs FPO"},"content":{"rendered":"<p>If you&rsquo;re new to investing in India, you might have heard the terms <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/ipo\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>IPO<\/a> and FPO. Let&rsquo;s break them down in simple terms.<\/p>\n\n\n\n<h2 id=\"what-is-an-ipo\" class=\"wp-block-heading\">What is an IPO?<\/h2>\n\n\n\n<p><strong>IPO<\/strong> stands for <strong>Initial Public Offering<\/strong>.<\/p>\n\n\n\n<p>Imagine a company as a private club. When it decides to open its doors to the public and let people buy a piece of it, that&#x2019;s an IPO.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>First Time:<\/strong> The company is selling its <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/shares\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>shares<\/a> to the public for the first time.<\/li>\n\n\n\n<li><strong>Purpose:<\/strong> To raise money for growth, pay off debts, or fund new projects.<\/li>\n\n\n\n<li><strong>Example:<\/strong> Think of a startup that&#x2019;s grown big and now wants to expand further.<\/li>\n<\/ul>\n\n\n\n<h2 id=\"what-is-an-fpo\" class=\"wp-block-heading\">What is an FPO?<\/h2>\n\n\n\n<p><strong>FPO<\/strong> stands for <strong>Follow-on Public Offering<\/strong>.<\/p>\n\n\n\n<p>Continuing our club analogy, if the club has already opened its doors (done an IPO) and later decides to invite more members by selling additional shares, that&#x2019;s an FPO.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Second Time or More:<\/strong> The company is already listed on the <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/stock-exchange\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">stock exchange<\/a> and is now issuing more shares.<\/li>\n\n\n\n<li><strong>Purpose:<\/strong> To raise additional funds or reduce existing debts.<\/li>\n\n\n\n<li><strong>Example:<\/strong> A well-known company wants to fund a new project and decides to issue more shares.<\/li>\n<\/ul>\n\n\n\n<h2 id=\"key-differences-between-ipo-and-fpo\" class=\"wp-block-heading\">Key Differences Between IPO and FPO<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>Feature<\/th><th>IPO<\/th><th>FPO<\/th><\/tr><\/thead><tbody><tr><td><strong>Meaning<\/strong><\/td><td>First-time public share offering<\/td><td>Additional share offering after IPO<\/td><\/tr><tr><td><strong>Company Status<\/strong><\/td><td>Private company going public<\/td><td>Already public company issuing more shares<\/td><\/tr><tr><td><strong>Risk Level<\/strong><\/td><td>Higher, as the company is untested<\/td><td>Lower, as the company has a track record<\/td><\/tr><tr><td><strong>Pricing<\/strong><\/td><td>Fixed or price band (book building)<\/td><td>Market-driven pricing<\/td><\/tr><tr><td><strong>Investor Info<\/strong><\/td><td>Limited information available<\/td><td>More information available<\/td><\/tr><tr><td><strong>Purpose<\/strong><\/td><td>Raise initial capital<\/td><td>Raise additional capital<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 id=\"real-life-example\" class=\"wp-block-heading\">Real-Life Example<\/h2>\n\n\n\n<p>Imagine a new restaurant in town.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>IPO:<\/strong> The restaurant opens for the first time and invites people to invest in it.<\/li>\n\n\n\n<li><strong>FPO:<\/strong> After a year of success, the restaurant wants to open a new branch and invites more people to invest.<\/li>\n<\/ul>\n\n\n\n<h2 id=\"which-one-should-you-invest-in\" class=\"wp-block-heading\">Which One Should You Invest In?<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>IPO:<\/strong> Potential for high returns but comes with higher risk.<\/li>\n\n\n\n<li><strong>FPO:<\/strong> Generally safer, as the company has a performance history.<\/li>\n<\/ul>\n\n\n\n<p>Your choice depends on your risk appetite and investment goals.<\/p>\n\n\n\n<h2 id=\"conclusion\" class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>Understanding the difference between IPO and FPO is crucial for making informed investment decisions. While IPOs offer a chance to invest in a company from the ground up, FPOs allow you to invest in companies with a proven track record.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you&#x2019;re new to investing in India, you might have heard the terms IPO and FPO. Let&#x2019;s break them down in simple terms. What is an IPO? IPO stands for Initial Public Offering. Imagine a company as a private club. When it decides to open its doors to the public and let people buy a [&#x2026;]<\/p>\n","protected":false},"author":9,"featured_media":0,"menu_order":0,"template":"","meta":{"footnotes":""},"class_list":["post-7666","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7666","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/9"}],"version-history":[{"count":1,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7666\/revisions"}],"predecessor-version":[{"id":7667,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7666\/revisions\/7667"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=7666"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}