A fresh issue is the portion of an IPO where new equity shares are created and issued to the public. The proceeds from a fresh issue flow directly to the company's balance sheet and are used as detailed in the 'Objects of the Issue' section of the RHP — typically capacity expansion, debt repayment, working capital, or general corporate purposes.
Fresh issues are generally viewed favourably because the capital is productively deployed into the business. The opposite is an Offer for Sale (OFS), where existing shareholders sell their stake and the proceeds do not flow to the company. Most IPOs are a mix of fresh issue and OFS — the ratio is disclosed in the RHP.
A 100% fresh issue structure indicates that no existing shareholder is exiting through the IPO and all proceeds are reinvested in the business. This is often interpreted as a positive signal about promoter confidence and growth ambitions, though it should always be weighed against the use of proceeds and the issuer's actual capacity to deploy capital productively.