Capital increase
What is it?
A capital increase is a process through which a company raises its share capital by issuing new shares. This mechanism allows companies to obtain additional resources that can be used to finance investment projects, reduce debt, or strengthen their financial structure in response to operational or market challenges.
There are two main types of capital increases:
Capital increase with cash contributions: Shareholders or new investors inject fresh capital in exchange for new shares.
Capital increase with non-cash contributions: Assets such as goods or rights are contributed to the company’s share capital.
In addition, a capital increase can be carried out in different ways, such as issuing common shares, preferred shares, or even through debt-to-equity conversion.
Key aspects to consider
A capital increase is a key strategic tool for companies. However, it may also have significant implications for existing shareholders, as it could dilute their ownership if they do not purchase new shares during the increase. For this reason, many companies offer preemptive subscription rights, allowing existing shareholders to maintain their proportion of ownership.
From an investor’s perspective, participating in a capital increase may present an opportunity to acquire shares at more competitive prices—especially if the company plans to use the funds for high-potential projects or to improve profitability.
An important aspect of this process is transparent communication from the company. Shareholders must clearly understand the purpose of the capital increase, the associated risks, and the expected benefits. In regulated markets, capital increases are subject to oversight by the relevant authorities to ensure compliance with regulations and protect investors’ interests.