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Difference Between IPO and FPO

Difference Between IPO and FPO

  • Calender22 Dec 2025
  • user By: BlinkX Research Team
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    • Understanding the difference between FPO vs IPO usually helps investors understand how companies raise capital at different stages. An IPO is generally used when a company offers shares to the public for the first time, while an FPO occurs when a listed company issues additional shares. Both methods can support business growth, fund expansion, or meet operational needs. This article explains the difference between IPO and FPO and the steps to invest in them. 

    Key Differences Between IPO vs FPO 

    Understanding the difference between IPO and FPO is crucial to make informed investment decisions. Below are the IPO and FPO differences presented in a table. 

    Particulars 

    IPO 

    FPO 

    Meaning An IPO is the initial stage of a company's public offering. It is a strategy where a publicly listed company issues more shares to raise additional capital. 
    Company IPO shares are issued by privately held companies Issued by publicly traded companies 
    Information availability The company’s information is not easily available The company’s information is available and can be accessed by anyone. 
    Underwriting The IPO process always involves underwriting by investment banks Generally, underwriting is not involved. 
    Regulatory Requirements The IPO process has strict regulatory scrutiny and is subject to disclosures Regulatory requirements are less stringent 
    Price Determination The offer price is determined by the company along with the lead managers The equity shares are usually offered at the current market price or at a slight discount to the current market price 
    Potential for higher returns High potential for capital appreciation Low potential for capital appreciation 
    Risk Generally, carries a higher risk Comparatively carries a lower risk 

    Table of Content

    1. Key Differences Between IPO vs FPO 
    2. How to Invest in an IPO and FPO ?
    3. Which is Better for You? 
    4. Conclusion  

    How to Invest in an IPO and FPO ?

    How to Invest in IPO?

    Here are the steps to invest in IPO: 

    Step 1: Open a Demat and trading account, as all IPO shares are delivered digitally.  

    Step 2: Check the IPO schedule, price band, and related information on exchange websites (NSE/BSE) or financial news platforms.  

    Step 3: Choose an application method. Investors typically apply through ASBA in their bank account or via UPI through their trading app.  

    Step 4: Enter the bid details, including the number of lots and the price within the range, or choose the cut-off option if allowed.  

    Step 5: Confirm the request. The bank or UPI system blocks the application amount until the allotment process is completed.  

    Step 6: Wait for the allotment. If shares are allotted, they appear in the Demat account before the listing date.  

    Step 7: Review the listing price on the listing day and decide whether to hold or trade the shares. 

    How to Invest in FPO?

    Investors can follow below steps to invest in FPO: 

    Step 1: Read the company’s offer document to understand the purpose of the FPO and basic financial details.  

    Step 2: Ensure the Demat account is active because any allotted shares will be credited there.  

    Step 3: Select an application method such as ASBA through online banking or submit an authorised physical form if available.  

    Step 4: Fill in the bid quantity and price within the declared band and provide the required personal details.  

    Step 5: Submit the application online or offline before the FPO closes. The bank blocks the amount under ASBA.  

    Step 6: Wait for the allotment process to finish. Any allotted shares are credited to the Demat account.  

    Step 7: Track the listing date and observe price movement to decide whether to hold or sell. 

    Which is Better for You? 

    Choosing between an IPO and FPO largely depends on investors’ financial goals and comfort with market volatility. Understanding the IPO and FPO difference usually helps individuals decide which option aligns with their investment style. An IPO may appeal to those willing to take on higher risk for potential early-stage growth opportunities, while an FPO could suit investors who prefer established companies with a market track record. Whether an individual invests in an IPO or an FPO, in both cases, reviewing the company’s fundamentals, business stability, and long-term prospects can support more informed decision-making. 
     

    Disclaimer: All investments are subject to market risks, economic conditions, regulatory changes, and other external factors. Returns are not guaranteed and may vary based on market performance and investment tenure. Investors should assess their risk tolerance and financial objectives, conduct their own research, and consult a qualified financial advisor before making any investment decisions. 

    Conclusion  

    Investors often choose between IPO vs FPO in the stock market, as they significantly influence their investment strategies. IPOs involve public share issuance, while FPOs target existing investors. IPOs mark a company's initial entry into the public market, while FPOs enable already-listed companies to raise additional capital. The timing, purpose, and implications of these offerings vary, reflecting different stages of a company's public journey. The BlinkX online trading app offers real-time market insights, a user-friendly interface, and advanced tools to help investors make informed investment decisions and seize opportunities 

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