So.. What is FPO?
What is Rights Offering?
Usually, existing stockholders accuse the promoters/management of a company for raising money by issue FPO, if the FPO is dilutive in nature and not rewarding the shareholders adequately. But if the management is good and uses non-dilutive FPO, then the reality is just the opposite.
[Read More:What is Dilutive and Non-Dilutive FPO?]
The funds raised enable the company to pay debts, act on its growth strategy and hence benefiting the stakeholders.
FPO is offered at a discounted price than the current market price of that company stock.
So an FPO is actually a good thing for the minority stockholders.
[Read More:What is Follow-On Public Offer (FPO) in Stock Trading?]