Follow on Public Offer (FPO) / Pashmina Shawls – Facts for Prelims

Follow on Public Offer

  • FPO (Follow on Public Offer) is a process by which a company, which is already listed on an exchange, issues new shares to the investors or the existing shareholders, usually the promoters.
  • An FPO is done to raise additional capital or to reduce existing debt and a company does it in two ways:
  • Dilutive FPO: In dilutive FPO, the company issues an additional number of shares in the market for the public to buy however the value of the company remains the same. This reduces the price of shares and automatically reduces the earnings per share also.
  • Non-dilutive FPO: Non-dilutive IPO takes place when the larger shareholders of the company like the board of directors or founders sell their privately held shares in the market.
  •  This technique does not increase the number of shares for the company, just the number of shares available for the public increases. Unlike dilutive FPO, since this method is not doing anything to the number of shares of the company, it does not do anything to the company’s EPS.

Pashmina shawl

  • The Changthangi or Pashmina goat, is a special breed of goat indigenous to the high altitude regions of Ladakh in Jammu and Kashmir. They are raised for ultra-fine cashmere wool, known as Pashmina once woven.
  • Pashmina Goat are found in the Ladakh (the high altitude region of the Himalayas) where the temperature is generally around -40 degree Centigrade in winters.
  • The Textiles are handspun and were first woven in Kashmir. The quality of Pashmina wool is very soft and fine. It is one of the finest and highest quality wool in the whole world
  • The Changthangi goat grows a thick, warn undercoat which is the source of Kashmir Pashmina wool – the world’s finest cashmere measuring between 12-15 microns in fiber thickness.
  • These goats are generally domesticated and reared by nomadic communities called the Changpa in the Changthang region of Greater Ladakh. The Changthangi goats have revitalized the economy of Changthang, Leh and Ladakh region.
  • The word Pashmina comes from ‘Pashm’, which means ‘soft gold’ in the Persian language. This is because the Cashmere wool that it is made from is luxuriously soft and fine. This makes Pashmina shawls unbelievably delicate, warm, and resplendent.
  •  Changthang is often called the rooftop of the world. This is owing to its altitude of more than 15000 feet above sea level.

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