InvestorQ : What is the difference between a new offer and a follow-on offer?
Lavanya Subramanian made post

What is the difference between a new offer and a follow-on offer?

Answer
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Archita Jajjoo answered.
1 year ago


The term IPO is actually a generic term that encompasses a variety of sub-items. For example, if the company is raising funds from the IPO market for the first time and getting the stock listed, then it is a new offer. The new offer leads to a listing and to expansion of the capital base of the company. Then there are Follow-on offers wherein the company is already listed but is looking at the IPO market for raising additional funds. Such companies are already listed on the exchanges and the IPO is just a means for raising additional funds for their plans. Finally, there is something called an offer-for-sale where the existing promoters and anchor investors hive off part of their holdings through an IPO. Most of the disinvestments undertaken by the government are in the form of offer for sale. In an OFS, the share capital of the company does not increase but it is only the ownership pattern that changes. An OFS is often used by companies to also list the company in the bourses. So, how to invest in IPO in India and how to subscribe IPOs online?