Yes, a listed company can certainly issue new shares. This usually happens via M&A, follow-on offer, rights issue and bonus shares. It might also happen via a QIP (qualified institutional placement). New share issue is referred to as equity dilution.
Companies issue shares as a means of raising additional capital to fund business operations or take up new investments. Public companies need approval from their shareholders before issuing shares. A share issuance requires issuing a prospectus, receiving application of shares, allotment of shares and a call on shares.
In the stock market, when the number of shares available for trading increases as a result of management’s decision to issue new shares, the stock price will usually fall.
You can appoint (add) new company shareholders at any point after incorporation. To do so, existing shares must be transferred or sold by a current member to the new person. Alternatively, you can increase your company’s share capital by allotting (issuing) new shares.
Depending on the issuing price of the new shares as compared to the current value of the stock, adding more shares may increase, maintain constant or decrease the value of a company’s stock. As a result, such a value change can have opposite effects on the share value for existing and new shareholders.
Does issuing stock increase stock price?
Typically, when money is raised by issuing shares, the company will provide an explanation of its plans for the additional capital. If the plan is to buy assets or even another company and the acquisitions will significantly increase profitability, the stock price should go up.
A new issue refers to a stock or bond offering that is made for the first time. Most new issues come from privately held companies that become public, presenting investors with new opportunities.
Contact the brokerage firm holding the stock and ask the broker to transfer the ownership of the stock to direct registration. Certificated shares purchased through an online process are generally held in street name registration.
The issue of shares is the procedure in which enterprises allocate new shares to the shareholders. Shareholders can be either corporates or individuals. The enterprise follows the rules stipulated by Companies Act 2013 while circulating the shares.