Last year, several companies launches their IPOs and got their shares listed
on stock exchanges ( BSE, SME and NSE ), including some well-known
companies. Swiggy’s IPO followed book-building process, raising a total of
rupees 11,327.43 crores this comprises of fresh issue of 11.54 crores
shares ( aggregating to rupees 4,499 crores ) and an offer for sale of
17.51 crores shares ( aggregating to rupees 6,888.43 crores ) shares got
listed on BSE, NSE on November 13, 2024.
More recently, this year, Ather Energy Limited also went public, Ather
Energy has launched its IPO, which includes a fresh issue of 8.18 crores
shares ( amounting to rupees 2,626.30 crores ), also with an offer for sale
of 1.11 crores ( totaling rupees 354.76 crores ). The IPO is open on April 28,
2025, and closed on April 30, 2025.
“As of today, May 30,2025, Neptune Petrochemicals Limited ‘s IPO is
ongoing, having commenced on May 28,2025,and concluding today. The IPO
followed the book-building process with a total issue size of rupees 73.20
crores, entirely through a fresh issue of 60.00 lakh shares. The price
band is set between rupees 112 and rupees 115 per share. As of the time
of writing, the IPO has been subscribed 1.95 times, with a total of 1,156
applicants.”
Capital
market
Primary Secondary
Market Market
Public Right Bonus Private
Issue Issue Issue Placement
Preferent Qualified
ial Institutional
IPO FPO Allotmen Placement
Fresh Offer for
issue sale
Fresh Offer for
issue sale
First of all, you should understand why companies issues their shares, what
the reasons behind it are, and what shareholders receive in return for
subscribing to shares,
There are several reasons behind by companies issue their shares are as
follows : 1. The company raise their capital from the market
by issuing their shares and getting funds in return ( equity financing ).
2. The funds which company gets can be utilized for expanding into new
market, new segments, and opening new branches (diversifying in new
places). 3. The company can also issue
shares to reduce or eliminate the burden of debt, this will ultimately improve
the financial stability and reduce the fixed-interest obligation.
4. Issuing share through an Initial public offering (IPO) allows early investors
and founders to sell some of their stakes ( Exit for early investors ).
5. Companies can offer Employee Stock Ownership Plans (ESOPs) and stock
options, this helps attract and retain talent by giving stake in company.
6. As listed on the stock exchange issuing shares improves companies
reputation and trust and also increase transparency for investors.
What shareholders receive in return for subscribing to shares :
1. Ownership rights in the company.
2. Right to receive dividend.
3. Voting rights.
4. The right to receive bonus shares and rights issues.
5. Right to transfer and sale ( but in some cases, there is some locking period
)
Now that we are aware of the reason behind it and the shareholders gain in
return, we will now discuss one of the issues of the primary market the public
issue, public issues are used by companies to raise funds from the market by
issuing securities ( Shares and Bonds) to the general public.
Types of public issues-
1.Initial Public Offering (IPO)
2. Follow-On Public Offering (FPO)
What is Initial Public Offering (IPO) ?
Then a private company offers shares to public for the first time, inviting
investors (QIB, bNII, sNII, RII, employee) to own portion of a company
(Anchor investors are not included in a public offering) after this process the
company get listed on an exchange and their shares are publicly traded
which means anyone can buy an sell shares on the stock exchange
A company can go for an initial public offering in two ways- it can either opt
for fresh issue of shares entirely, or it can combine a fresh issue within offer
for sale
Fresh issue – When a company go for an initial public offer and issue new to
public for the first time raising capital.
Offer for sale – In an IPO, existing shareholders such as promoters, early
investors, and major stakeholders sell their shares and reduce their holding
in the company through a transparent bidding process
Take an example of BlackBuck (Zinka Logistics Solutions Limited) IPO bidding
starts from November 13, 2024 and ended on November 8, 2024, IPO
followed book-building process, raising a total of rupees 1,114.72 crores this
issue is a combination of fresh issue of 2.01 crores shares (Amounting to
rupees 550.0 crores) and offer for sale of 2.07 crores shares (Amounting to
rupees 564.72 crores)
What is Follow-On Public Offering (FPO) ?
Any company that is listed on stock exchange through an initial public
offering (IPO) and subsequently issued additional shares (secondary offering)
to the public or investors to acquire funds from market, thereby increasing
the number of shares available for trading.
Types of FPO
Dilutive – When a company issues fresh shares through follow-on public
offering, it increases the number of outstanding shares in a market (Shares
float) and decreases earning par share (EPS)
Non-Diluted – When the promoters or shareholders of the company offered
their shares for sale to public or external investors, it will not increase the
number of outstanding shares in a market And also not reduces the earning
per share (EPS)
Take an example of Vodafone Idea Limited FPO bidding starts from April 14,
2024 and ended on April 22, 2024, IPO followed book-building process,
raising a total of rupees 18,000 crores this issue is entirely a fresh issue of
1,636.36 crores shares. Price band is set at rupees 11 per share
