New Delhi, May 7 -- A follow-on public offering (FPO) allows a company already listed on the stock exchange to issue shares to investors to raise capital. It is the process through which companies that have already raised money through an initial public offering (IPO) issue additional shares for more funds.

The market regulator has defined follow-on public offering as follows: "When an already listed company makes either a fresh issue of shares or convertible securities to the public or an offer for sale to the public, it is called an FPO."

There are two types of follow-on public offerings - dilutive FPO and non-dilutive FPO.

While an FPO relates to the issue of additional shares of a company already listed on the stock exchanges, an I...