NISM Certifications · NISM-Series-XV: Research Analyst · Introduction to Securities Market
A company issues shares to the public for the first time and, at the same time, an existing promoter sells part of their holding through the same offer document. This offer is best described as:
The offer is an initial public offer that combines a fresh issue, where the company creates new shares, with an offer for sale, where the promoter sells existing shares. It is not an FPO because this is the company's first public offering.
- AA rights issue with a bonus component
- BAn initial public offer combining a fresh issue and an offer for saleCorrect
- CA follow-on public offer only
- DA private placement
Explanation
A first-time public offer is an IPO. The company issuing new shares is a fresh issue, and the promoter selling existing shares is an offer for sale. Both can be in one offer document. It is not an FPO because the company is listing for the first time.
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