What is Further Public Issue and how to determine the FPO PRICE as Per Securities Law?
Fri, Jul 1, 2016 4:00 PM on Latest, IPO/FPO News, Featured, Stock Market,
A Further Public Offering (FPO) is an issuing of shares to general investors by a Public company that is already listed on Nepal Stock Exchange Limited(NEPSE).
FPO is essentially a futher issue of public share by a company that is already publicly listed and has gone through the IPO process. FPOs are popular methods for companies to raise additional share capital in the capital market.
FPO increases the number of shares outstanding resulting decling in earningsper share but the reserve of the company increase if the FPO is issued on premium. Overall networth per share rises due to addition of premium amount in reserve and surplus account.
Securities Registration and Issue Regulation, 2065
As Per Securities Registration and Issue Regulation, 2065 the company that has already floated its Initial Public Offering and is listed in the Nepal Stock Exchange can float Further Public Offering (FPO) to raise its paid up capital.
The companies can only issue FPO if
The companies should have atleast two years in profit in last five years. The net worth per share should be more than paid up capital per share.
The agenda of FPO of the company should be endorsed by its Annual General Meeting
If the company wants to issue FPO at premium price then the company should provide reason for such pricing and also should inform about the process using which the price has been fixed.
As per clause 30 of the act, descriptive document should be published
Securities Issue Guidelines, 2065
As Per Securities Issue Guidelines, 2065 following documents should be presented before the Securities Board of Nepal (SEBON) to issue shares at a premium price.
As Per Securities Registration and Issue Regulation, 2065 the company that has already floated its Initial Public Offering and is listed in the Nepal Stock Exchange can float Further Public Offering (FPO) to raise its paid up capital.
The companies can only issue FPO if
The companies should have atleast two years in profit in last five years. The net worth per share should be more than paid up capital per share.
The agenda of FPO of the company should be endorsed by its Annual General Meeting
If the company wants to issue FPO at premium price then the company should provide reason for such pricing and also should inform about the process using which the price has been fixed.
As per clause 30 of the act, descriptive document should be published
Securities Issue Guidelines, 2065
As Per Securities Issue Guidelines, 2065 following documents should be presented before the Securities Board of Nepal (SEBON) to issue shares at a premium price.
- Details of the requirements as per the Company Law
