A complete guide on IPO, FPO, OFS, and Rights Issue of Shares
Last updated August 22, 2026
This IPO News guide/article covers “A complete guide on IPO, FPO, OFS, and Rights Issue of Shares”. The page is organized around ipo – initial public offering, ri – rights issue of shares, fpo – follow on public offering, ofs – offer for sale, key differences between ipo, ofs, fpo and rights issue. The source record was published on \",\"Thursday, May 30, 2024\",\". IPO News presents the structured facts and tables in its own layout and wording.
Topics Covered
- IPO – Initial Public Offering
- RI – Rights Issue of Shares
- FPO – Follow on Public Offering
- OFS – Offer for Sale
- Key differences between IPO, OFS, FPO and Rights Issue
- Dilution of Ownership
- Stake Dilution in IPO, FPO, OFS, and RI
- Ownership dilution in IPO
- Equity dilution in FPO
- Stake dilution in OFS
- Dilution of Ownership in Rights Issue
- Zerodha Trade@20
- Compare Stock Brokers Side-by-Side
Key Facts
- India's trusted financial research platform since 2015. Live IPO GMP, subscription data, allotment status, Rights Issues, NCDs and unbiased stock broker reviews.
- Tata Technologies launched IPO of Rs 3042 Cr in November 2023. The public issue was offered for Rs 500 per share and the company’s shares got listed at Rs 1200 on BSE and NSE. Know more.
- Vodafone Idea FPO was announced in April 2024 at a price of Rs 10-11 per share and the FPO was listed at Rs 11.8 on the NSE and Rs 12 on the BSE. Know more
- OFS is offered at a floor price and interested applicants (retail and non-retail) can bid for OFS at or above the floor price.
- Let’s understand how dilution happens with an example. Suppose a company has 100,000 shares currently in the market with 10 investors each holding 10,000 shares.
- Total shares in the market: 100,000 shares
- Existing investors = 10, each having 10,000 shares
- Existing shareholders stake = 10,000/1,00,000 = 10% ownership stake
- Now, suppose a company issues further 25,000 shares in the market via FPO to raise capital, and a new investor buys them all. How will it affect company’s ownership structure?
- Additional issue of shares = 25,000
- Total shares in the market = 100,000 + 25,000 = 125,000
- Total number of investors/shareholders = 11
- New investor’s stake = 25,000/125,000 = 20% stake
- Existing investor’s stake = 10,000/125,000 = 8% stake
- Thus, it is clear that as new shares were offered, ownership gets diluted with new investors having 20% stake while the existing shareholders proportionate stake gets reduced to 8%.
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Data Tables
| Basis of Difference | IPO | OFS | FPO | RI |
|---|---|---|---|---|
| Who can offer? | ||||
| Ideal for whom? Need of the issue | IPO is the best way to raise money by a non-listed company to expand its business. | OFS is available to the Top 200 companies that allows listed company's promoters to reduce their stake transparently through an exchange bidding platform. | Best for listed companies to raise capital because in FPO, companies have choice either to make fresh issue which dilutes ownership else, promtoers can sell their shares without stake dilution. | When a company wants to raise money via equity financing but do not want to invite new shareholders, it can go for right issue offering to the existing shareholders. RI may also be offered by companies that are in financial trouble so be aware before you apply. |
| Regulatory Framework | Stringent regulatory framework with DRHP and RHP filling to exchange and SEBI with regulatory approval. | SEBI regulations requires a company to have a minimum public shareholding of atleast 10% to opt for OFS. | Fewer regulatory requirements than IPO process. | Less regulatory requirements and in the fast track right issue of more than Rs 50 cr subject to SEBI ICDR 99 regulations, there is no need to file draft letter of offer with SEBI. Also, the right issues of upto Rs 50 cr size takes nearly 2-3 months to be completed. |
| Minimum Market Capitalization Required | Rs 25 crore | Rs 1000 crore | Rs 25 crore | No |
| Nature of the Company | An unlisted Company | Listed Company | Listed Company | Listed Company |
| Types of Offering | Fresh issueOffer for sale | – | Dilutive FPO Non-dilutive FPO | – |
| Issue of New Shares | Yes in Fresh issue | No | Dilutive FPO: Yes; Non-dilutive FPO: No | Yes |
| Types of Offering | Fresh issueOffer for Sale | – | Dilutive FPO Non-dilutive FPO | – |
| Primary Market Issue | Yes | Yes | Yes | Yes |
| Pricing | Fixed price or Book-building method based on company's valuation, market condition, etc. | Floor price is decided, insitutional investors can bid at or above the floor price while retail investors can get upto 5% discount. | Pricing of FPO is based on company's financials, performance, market condition, and investors demand. | Right issues are generally offered at a discount to the prevailing market price. |
| Objective | ||||
| Raise capital for the Company | Yes | No | Yes | Yes |
| Exit Route for Existing Investors | No | Yes | No | No |
| Effect on important business metric | ||||
| Increase in number of outstanding shares | Fresh issue: Yes;Offer for sale: No | No | Dilutive FPO: Yes;Non-dilutive FPO: No | Yes, in proportion to the existing shareholding |
| Increase in Share capital | Fresh issue: Yes;Offer for Sale: No | No | Dilutive FPO: Yes;Non-dilutive FPO: No | Yes |
| Decline in EPS | Fresh issue: Yes;Offer for sale: No | No | Dilutive FPO: Yes;Non-dilutive FPO: No | Yes |
| Share market price gets adjusted | No | No | No | Yes |
| Listing on Exchange | BSE, NSE | No | BSE, NSE | BSE, NSE |
| Reservation | ||||
| Reservation for Institutional Investors | 50% | 25% | 50% | In proportion to their existing holdings |
| Retail Reservation | 35% | 10% | 35% | In proportion to their existing holdings |
| Minimum Subscription | 90% | No | 90% | No |
| Proportional Allotment | Retail investors: Lottery;NII investors: Proportional | No | Retail investors: Lottery;NII investors: Proportional | Yes |
| Who can Apply | ||||
| Bidding Period | 3-5 days | 1 day | 3-5 days | 15-30 days |
| Anyone (Existing or new investor) | Yes | Yes | Yes | No |
| Only Existing Investors | No | No | No | Yes |
| Record Date to be eligible to apply | No | No | No | Yes |
| Apply via ASBA | Yes | No | Yes | Yes |
| Apply via Broker | Yes | Yes | Yes | Yes |
Source record: View original public source ↗