Difference in IPO, FPO & QIP

 

IPO, FPO, and QIP are all methods used by companies to raise capital by selling shares in the stock market. Here's a brief explanation of each:

 

Initial Public Offering (IPO): An IPO is the first time a company issues shares to the public. In an IPO, the company raises capital by selling shares to investors who are interested in owning a part of the company. The process involves filing a prospectus with the regulatory authorities, setting an offering price, and then offering the shares to the public through a stock exchange.

 

Follow-on Public Offering (FPO): A follow-on public offering (FPO) is a secondary offering of shares by a company that has already gone public through an IPO. The company may need additional capital for various reasons, such as funding expansion or paying off debt. In an FPO, the company issues new shares and sells them to the public.

 

Qualified Institutional Placement (QIP): A QIP is a private placement of shares by a listed company to qualified institutional buyers such as mutual funds, insurance companies, and other institutional investors. In a QIP, the company does not offer shares to the public, but rather to a select group of institutional investors who have been approved by the regulator.

 

In summary, IPO and FPO are public offerings, while QIP is a private placement. IPO is the first time a company issues shares to the public, while FPO is a subsequent offering by a company that has already gone public. QIP is a private placement of shares to institutional investors.