Explain Further Public Offer and its Eligibility requirements.

Further Public Offer (FPO):

A Further Public Offer (FPO) is a process through which a listed company raises additional capital by offering more shares to the public or existing shareholders. It is a way for companies to raise funds for expansion, debt repayment, or other corporate purposes. Here's an overview of FPO and its eligibility requirements:

Eligibility Requirements for FPO:

1. Listed Company: The company must already be listed on a stock exchange and have a track record of compliance with regulatory requirements.
2. Purpose: The company must have a valid reason for raising additional capital, such as funding expansion plans, reducing debt, or financing acquisitions.
3. Regulatory Approval: The company must obtain approval from the regulatory authority overseeing securities markets, such as the Securities and Exchange Board of India (SEBI) in India.
4. Shareholder Approval: In most cases, the company will need approval from its shareholders for the FPO through a special resolution passed at a general meeting.
5. Compliance: The company must comply with all regulatory requirements related to the issuance of securities, including disclosure norms and pricing guidelines.
6. Minimum Public Shareholding: The company must ensure that its public shareholding meets the minimum threshold required by the stock exchange and regulatory authorities.
7. Pricing: The pricing of the FPO must be done in accordance with the pricing guidelines prescribed by the regulatory authorities.
8. Offer Document: The company must prepare an offer document containing all relevant information about the FPO, including the purpose of the issue, financial information, and risk factors.
9. Underwriting: The company may choose to underwrite the FPO to ensure that it is fully subscribed. Underwriting may be done by the company's existing shareholders, financial institutions, or investment banks.

Benefits of FPO:

• Capital Infusion: FPO provides a way for companies to raise additional capital without taking on debt.
• Market Liquidity: FPO can increase the liquidity of a company's shares by increasing the number of shares available for trading.
• Increased Visibility: FPO can increase a company's visibility in the market and attract more investors.
• Enhanced Financial Flexibility: FPO can provide companies with the financial flexibility to pursue growth opportunities.

In conclusion, Further Public Offer (FPO) is a method used by listed companies to raise additional capital by offering more shares to the public or existing shareholders. It helps companies fund their growth and expansion plans while providing investors with an opportunity to invest in established companies.