2.WHAT IS AN IPO AND FPO?

Before going to discuss about the IPO(INITIAL PUBLIC OFFERING ) AND FPO (FOLLOW ON PUBLIC OFFER), lets have a look on the Stock Exchange.
Do you remember,in the previous post we came to know that the stock market is a place where the selling and buying of stocks takes place,here the stock market is nothing but the STOCK EXCHANGE.some of the stock exchanges are New york stock Exchange (NYSE),NASDAQ,Bombay Stock Exchange(BSE),National stock Exchange India(NSE),etc.

Now we got a bright idea about the Stock Exchange.
Basically Capital market is divided into
1.Primary market
2.Secondary market
For the better understanding of these terms lets have an example
A person wants to do the apple business.In order to do this off course he need some apples and a market to sell his apples for the better profit.so, one day he went to a farmer to buy fruits, farmer offered him a cost of Rs. 7 per apple and he made an agreement to buy it.Now he got some apples ,next he finds the market to sell his fruits and set the cost of Rs. 10 per apple.Finally at the end of the day he was successful in selling them.
As when the person purchased apples for Rs. 7 from the farmer is nothing but the primary market,and when he sold the apple in his market is simply we call secondary market.Cost which is offered by the person to the farmer i.e Rs. 7 is simply we call as Initial price offer.
similarly when comes to the stock exchange, when company issues the shares to the public i.e PRIMARY MARKET and offers a price band  to sell them is nothing but the IPO (INITIAL PUBLIC OFFERING). When people purchased  it and went to the share market to sell there shares for the better profit is nothing but the SECONDARY MARKET.Here Stock Exchange is simply the SECONDARY MARKET.Now you got what's the IPO is lets see the definition below

IPO: An initial public offering (IPO) or stock market launch, is the first sale of stock by a  company to the public.

As when company  listed in  the stock exchange after due time when it(company) thinks to increase their funds for the betterment of the company they further issues some more shares ,it is simply we call as FPO(FOLLOW ON PUBLIC OFFER).

FPO:An FPO is essentially a stock issue of supplementary shares made by a company that is already publicly listed and has gone through the IPO process. 

we will be discussing about the types of companies and the shares in upcoming posts...

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