The shares of a company can be offered to the public in a quantity determined through a process regulated by law and by the Securities and Exchange Commission (CVM, in Portuguese). This process is comprised of several stages: from the assessment of the market's intentions regarding the shares that will be offered to the moment they are effectively traded.

When a company makes the first public offer of shares, this operation is called an IPO (Initial Public Offer). But, if it is already a publicly-held company and has already had an IPO, the new offers are referred to as follow-on.

The public offer of shares made by companies has several advantages:

  • Additional liquidity;
  • Investments to finance projects or other needs;
  • Visibility in Latin America's largest capital market.
  • Primary and secondary offer of shares

    Primary offer – when the company itself is the seller of the shares. In this case, there is a real increase of the share capital of the company through the issue of new shares and the resources resulting from the sale are channeled to the company's cash flow and used in investments, project financing or other needs.

    Secondary offer – when one or several shareholders, who may be the company's controller or not, put their shares up for sale. Since those shares already exist, there is no change in the share capital of the company. In this case, the financial resources resulting from the sale are channeled to the selling shareholders and not to the company.

  • Ways to perform the follow-on

    Through CVM Instruction 400 - the offer is intended for the general public, including retail investors, and an extensive, transparent and appropriate dissemination of the information on the offer, the offered shares, the company and others involved is required. Such public offers must be previously suB3itted to registration in the CVM and in B3&FBOVESPA.

    Through the CVM Instruction 476 - the offer is intended exclusively for professional investors, being distributed with restricted efforts. Additionally, the offer with restricted efforts is dismissed from CVM registration and there is no obligation to draw up a prospectus.

    In relation to the local sale effort of these shares:

    • They can be offered to a maximum of 75 professional investors and;
    • They can be purchased by a maximum of 50 of these investors, with no limitation of number in case of foreign investors.