Companies may choose to raise capital through the issue of new shares or debt. To raise capital, companies can access a large pool of investors and obtain funding for activities including expansion of business operations, acquisitions or to improve balance sheet strength.
If a company is looking to raise equity capital they may consider an Initial Public Offering (IPO). An IPO is undertaken when a company raises capital prior to listing on the Australian Securities Exchange (ASX).
Another example of capital raisings are hybrid securities, which are a combination of debt and equity, typically issued by banks. To find out more about hybrid securities, watch our Hybrids 101 video.