Rights Issues and Capital Raises in Nigeria: What Presco, and FCMB, Tell Us About Investor Confidence in October

In October 2025, Nigeria’s capital market was buzzing again with activity. A new wave of rights issues and capital raises by major corporations like Presco Plc, and FCMB Group is reshaping how investors and businesses think about funding. These moves show that, despite economic pressure and a tight liquidity environment, Nigerian companies are getting more creative in raising fresh capital while testing how much confidence still exists among local investors.

A rights issue happens when a company offers its existing shareholders the opportunity to buy more shares directly from the company, usually at a discount. It’s a way for firms to raise fresh capital without borrowing more from banks. For investors, it can be both an opportunity and a test of confidence. If shareholders believe in the company’s future growth, they buy more. If they don’t, they let the offer pass and risk dilution.

In 2025, rights issues have become a popular tool in the Nigerian market again, partly because high interest rates have made traditional borrowing very expensive. Companies are turning to equity financing to strengthen their balance sheets, fund expansion, and reduce exposure to costly debt.

Presco Plc: Expanding Through Equity 

Presco Plc, one of Nigeria’s leading agribusiness and palm oil producers, announced plans to raise additional capital through a rights issue to finance its expansion in processing and plantation development. The company has performed well over the past two years, benefiting from strong global palm oil prices and local demand for edible oils and biofuels.

This rights issue signals Presco’s intention to double down on self-sufficiency and capacity building. By tapping into existing shareholders rather than external loans, Presco aims to reduce its debt burden and strengthen long-term sustainability. For investors, the move can be interpreted as a show of management confidence that demand for palm oil and related products will remain resilient despite economic headwinds.

FCMB: Strengthening Capital Adequacy 

For FCMB Group, the story is more financial-sector specific. The Central Bank of Nigeria has been pushing banks to shore up their capital bases following new prudential guidelines and the looming recapitalization drive aimed at ensuring financial system stability.

FCMB’s decision to go to the market through a rights issue is therefore both proactive and strategic. It helps the bank stay ahead of regulatory pressure while maintaining flexibility to grow its loan book in key sectors like agriculture, SMEs, and manufacturing. Investors see this as a vote of confidence in FCMB’s stability and forward planning, especially in a year when many banks are under pressure to strengthen their capital buffers.

In a period where credit demand is rising but risk costs remain high, FCMB’s move to raise fresh equity capital is likely to improve its resilience and competitiveness in the Nigerian banking landscape.

The combined activity from Presco, and FCMB, reflects a broader trend: Nigerian companies are diversifying their funding strategies. Rights issues, equity placements, and commercial papers are increasingly seen as practical tools for capital optimization.

Investors, on the other hand, are paying closer attention to fundamentals. In a market where inflation still hovers around 20% and interest rates remain elevated, only firms with solid governance, consistent earnings, and clear growth strategies can attract meaningful participation.