Wave of new share issuances raises dilution concerns

Wave of new share issuances raises dilution concerns

Around 70 per cent of planned issuances have yet to be carried out, suggesting that both capital-raising pressure and the market's ability to absorb new shares could increase significantly in the second half of the year.

A worker watches stock movements on a computer. — VNA/VNS Photo

The stock market may face increasing dilution risks by the end of 2026 as listed companies accelerate capital raising plans, with the volume of newly issued shares projected to reach the highest level in years.

According to the statistics from FiinTrade, total planned equity issuance and initial public offerings (IPOs) by listed and registered companies had reached approximately VNĐ289.5 trillion (US$11 billion) as of May 25, up 86.5 per cent compared with 2025 and 2.5 times the average level recorded over the previous five years.

The figure marked the highest scale of fundraising since the market boom in 2021, indicating that the stock market is gradually regaining its role as a medium- and long-term capital channel for businesses, after several years during which bank credit and corporate bonds played a more prominent role.

FiinTrade noted that around 70 per cent of planned issuances had yet to be carried out, suggesting that both capital raising pressure and the market's ability to absorb new shares could increase significantly in the second half of the year.

IPO activity is expected to reach VNĐ22.4 trillion this year, down 42 per cent from VNĐ38.6 trillion recorded in 2025. The market has yet to witness the emergence of the large deals that investors had anticipated.

According to the report, the structure of IPO activity is also changing. Instead of being driven mainly by equitisation and State divestment as in previous cycles, new listings are increasingly originating from private-sector companies, particularly spin-offs and ecosystem restructuring transactions.

Recent IPO plans have largely concentrated on the securities sector, with LPBank Securities (LPBS) and KAFI Securities Corporation (KAFI) preparing listings later in 2026 following IPOs by VPS, VPBankS and TCBS in 2025. 

Dien May Xanh is among the few notable consumer-sector companies preparing for an IPO this year, while previously anticipated names such as Golden Gate, Highlands Coffee, The CrownX and Long Chau have yet to appear.

The banking industry is entering what FiinTrade described as its largest capital increase cycle on record. Planned equity fundraising by banks is estimated at VNĐ128 trillion, more than seven times the issuance scale seen in 2025 and 71.6 per cent higher than the five-year average. 

The report says the move reflects banks' need to strengthen Tier-1 capital, expand balance sheets and prepare for a new credit growth cycle.

Major banking issuance plans this year include those of Vietcombank, BIDV, VPBank, HDBank, MBBank and NVB, with most expected to be conducted through private placements.

Outside the banking sector, fundraising plans continue to focus on financial services and real estate companies. 

Securities firms such as Ho Chi Minh City Securities (HCM), VNDirect Securities (VND), Viet First Securities (VFS) and Viet Dragon Securities (VDS) are expected to raise around VNĐ48.2 trillion through private placements and rights offerings to existing shareholders, in order to expand margin lending and proprietary trading activities. 

Meanwhile, planned equity issuance by real estate companies is estimated at nearly VNĐ37.3 trillion, with notable issuers including Novaland, Foreign Trade Development & Investment Corporation of HCMC (FDC) and Vietnam Rubber Group (VRG).

FiinTrade said dilution risk would be one of the key factors requiring close monitoring in 2026 as total new shares issued through capital increases and stock splits are projected to reach approximately 48.2 billion shares, up 26 per cent from a year earlier and equivalent to around 17.1 per cent of total outstanding shares at the end of 2025.

Of the total, stock splits, stock dividends and bonus shares are expected to account for 28.8 billion shares, broadly unchanged from 28.2 billion shares in 2025. Meanwhile, shares issued for capital raising purposes are projected to exceed 19.4 billion shares, representing a year-on-year increase of 91.6 per cent.

Amid a weak recovery in market liquidity, continued net foreign selling and increasingly divergent earnings growth among sectors, the large volume of new share supply expected to enter the market may increase dilution risks and put pressure on market valuations.

Bizhub