📢 IPO vs FPO Made Simple! | A Must-Know for CBSE IFM/FMM Students 💸

 Ever wondered how companies raise money from the public? Let’s break it down in a way that’s super easy to understand — whether you're an IFM/FMM student or just someone curious about the stock market.

🏛️ What is the Primary Market?

The primary market is where securities (like shares or bonds) are sold for the first time by a company or government directly to the public.

This is where new money flows into a company — and it’s the first step in a company going public.

🔁 And the Secondary Market?

The secondary market is where investors buy and sell securities from each other, not from the company.

This is where trading happens every day — like on the NSE (National Stock Exchange) or BSE (Bombay Stock Exchange) or NYSE ( New York Stock Exchange)

🎯 IPO vs FPO – What Are They?

These are two popular ways companies raise funds in the primary market.

🟢 1. IPO – Initial Public Offering

An IPO is when an unlisted company (not yet on the stock exchange) offers its shares to the public for the first time.

It’s the company’s big moment — opening its doors to public investment.

🔹 IPO shares can be:

  • Fresh Issue – New shares created by the company

  • Offer for Sale – Existing owners (called promoters) sell their shares to the public

🔵 2. FPO – Further Public Offering

An FPO is when an already listed company (i.e., already on the stock exchange) issues more shares to the public.

🔹 FPO also has two types:

  • Fresh Issue – New shares issued to raise more capital

  • Offer for Sale – Existing promoters sell their shares to the public

📘 Fresh Issue vs Offer for Sale

  • Fresh Issue: The company creates new shares to raise money.

  • Offer for Sale (OFS): Promoters sell their existing shares to the public.

📘 Fresh Issue vs Offer for Sale

  • Fresh Issue: The company creates new shares to raise money.

  • Offer for Sale (OFS): Promoters sell their existing shares to the public.


Still Confused?

Check out our Introduction to Financial Markets blog — where we explain every basic term you need to know!
📎 Read now →


💬 Got questions? Drop them in the comments and I’ll personally answer them!
📢 If you found this helpful, please like, share, and spread the knowledge.
Thanks for reading!


Comments

Post a Comment

Popular posts from this blog

Think Global, Trade Global: ADRs & GDRs in 5 Minutes

  🌐 ADRs and GDRs: How Indian Companies Go Global Let’s break down these financial tools — no big words, no confusion.   📦 So, what are ADRs and GDRs? They’re just special certificates that let companies from one country (like India) sell their shares in other countries — without actually going there. This helps them raise money from global investors. Let’s look at both, one by one.   ADR – American Depository Receipt An ADR is like a receipt that shows you own shares in a non-U.S. company (like an Indian company), but it’s made for U.S. investors. These receipts are in U.S. dollars , which makes it easier for Americans to buy shares in companies outside the U.S. ADRs are issued by U.S. banks like JP Morgan Chase . They help investors avoid currency risks (no need to deal in rupees or other foreign money). These shares can be traded on U.S. stock markets like: NYSE (New York Stock Exchan...
Read more

What Affects the Price of a Stock? | Stock-Specific vs Market-Specific Factors

Have you ever wondered why the price of a stock goes up or down ? It’s not just numbers on a screen — there are real reasons behind every movement in the stock market. Today, we’ll break it down into two key categories : Stock-Specific Factors Market-Specific Factors 🔍 1. Stock-Specific Factors These are factors unique to a particular company . They’re based on: Public perception Future earning expectations Quality of management Marketing strategies Innovation and product appeal 🧠 In simple terms: It’s all about what people think will happen with that company — and how much they believe in its success . 📌 Example: Let’s say Company A launches a new sunglasses brand and uses Gen Z influencers and celebrities to promote it. What can happen? 📈 Option 1: Investors love the idea, see potential in Gen Z marketing, and start buying the stock . ➤ This increases demand , and the stock price goes up . 📉 Option 2: Some investors feel Gen Z is too niche...
Read more