If the text box or shape already contains text, a drop cap is added to the start of the paragraph that contains the insertion point. If the text box or shape is empty, the drop cap appears when you start typing.
Do any of the following:
Quickly change the appearance of the drop cap: Select a preset style in the menu below the Drop Cap switch.
Change the position of the drop cap or add a background shape: Tap Drop Cap Options, then make any adjustments.
For example, you can make the text flow right up against the drop cap letter by selecting Contour in the Text Wrap settings, or add a circle behind the drop cap by turning on Background Shape and setting the Corner Radius to 100%.
Use a different font style, size, or color for only the drop cap (not the entire paragraph): Select the drop cap, then tap Make characters superscript or subscript in Pages on iPad