Nigerian companies are positioning for a new phase of capital formation as improving economic conditions and rising profitability drive a return to equity markets.
Market analysts anticipate a wave of rights issues in 2025 as listed firms move to rebuild their balance sheets, retire expensive debt, and strengthen liquidity after a turbulent financial cycle.
Industry experts believe the next twelve months could see a resurgence in equity fundraising across key sectors including telecommunications, manufacturing, and consumer goods.
The improved outlook follows a year of balance sheet pressure triggered by foreign exchange losses and high domestic interest costs. With profits recovering and the macroeconomic environment stabilising, several corporates are now expected to tap shareholders for fresh capital.
According to capital market strategists, many companies are taking advantage of the renewed investor confidence on the Nigerian Exchange to recapitalise through rights issues instead of debt.
The strategy allows firms to reduce leverage, improve solvency ratios, and align with post-reform monetary policies aimed at stabilising inflation and exchange rates.
Financial market analysts say companies such as MTN Nigeria, Nestle, and Dangote Sugar are leading a broader movement towards balance sheet repair. After years of currency-induced write-downs, these firms are now recording positive earnings growth and stronger cash flows, providing a foundation for sustainable expansion.
By reinvesting profits and raising equity capital, they are also improving valuation metrics and restoring investor trust.
The expected rise in rights issues is further supported by favourable market sentiment and growing institutional interest in Nigerian equities.
Pension funds and asset managers have gradually increased their exposure to listed companies following improved policy consistency and stronger disclosure standards from the Securities and Exchange Commission. This growing pool of domestic investors provides a stable base for new equity issuances.
Analysts also note that renewed capital market activity could strengthen the financial system, deepen liquidity, and create a more diversified source of long-term funding for businesses.
Unlike debt instruments, rights issues offer companies an opportunity to recapitalise without increasing interest burdens or currency exposure, especially at a time when global credit markets remain volatile.
The broader macroeconomic reform programme, which includes fiscal adjustments and foreign exchange normalisation, has started to reduce uncertainty for investors.
With these stabilising measures in place, corporates are regaining confidence to execute expansion plans, upgrade infrastructure, and invest in local production to hedge against future volatility.
For equity investors, the coming wave of rights issues presents both opportunity and caution. While recapitalised firms may experience valuation gains from improved financial health, participation decisions will depend on sector fundamentals, pricing strategies, and earnings visibility.
If successfully executed, the new phase of capital raising could mark a turning point for Nigeria’s private sector—signalling not only financial recovery but also renewed investor faith in the nation’s long-term growth story.
