Capital increase (Kapitalerhöhung)
A company issues new shares to raise fresh equity.
In short
As of 8 October 2026In a capital increase, a stock corporation issues new shares to raise fresh equity, for example for takeovers or paying down debt. Existing shareholders are diluted but usually get a subscription right to the new shares. The general meeting has to approve the capital increase or authorise it in advance.
In a capital increase, a stock corporation issues new shares in exchange for money. This strengthens the equity ratio and funds takeovers, investment or debt reduction. The first big one is the IPO.
For existing shareholders, profit is spread over more shares and their stake is diluted. To protect them, they usually get a subscription right to buy new shares in proportion to their holding. The general meeting must approve the capital increase or authorise it in advance (§ 182 ff. AktG). A surprise capital increase often pushes the price down.
Example: a company with 100 million shares issues 10 million new ones. If you held 1 % and do not take part, you hold about 0.91 % afterwards. The basics are in why stock markets exist.
Related terms
Sources
As of 8 October 2026 · Educational content, not investment or tax advice.