Context:

• Zomato IPO is coming to market for raising the funds.

Means of raising fund in the primary market

Initial Public Offer (IPO)

• Initial Public Offer is the process of offering its new securities to the public/ investor for the first time through the issue of prospectus.
• It is issued only by the unlisted company (a company whose shares are not traded on a stock exchange).

Follow on Public Offer (FPO)

• Follow on Public Offer (FPO) refers to the process where already listed company offers its securities to the public/investor to an offer for sale.
• A follow-on offering is the issuance of additional shares made by a company after an initial public offering (IPO).
• It is also called as the secondary offering.

Right Issue

• A listed company offers its new securities only to the existing shareholders in proportion to their existing shareholding.
• In the Right Issue, shares are issued at a discount.

Referential Issue

• Under this, a listed company offers its new securities only to a selected class of shareholders.

Bonus Issue

• Bonus shares or issues are additional shares given to the existing shareholders without any additional cost, in the proportion of their shareholding in lieu of distribution of dividend.

Private Placement

• Raising capital by selling the share to a select group of investors, or individual.
• The advantage of the private placement is saving in marketing expenses.
• Under this, number of investors who are issued shares cannot be more than 50.

Sweat Equity

• Under this, the share is allotted to top management

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