What Is the Difference Between a Public Offer and a Rights Issue in Nigeria’s Stock Market?

Good question—this is a core concept in stock investing, especially in Nigeria where companies like banks frequently raise capital.
Let’s break it down cleanly.
1. Public Offer (IPO / Secondary Offer)
A public offer is when a company sells shares to any member of the public.
What it means:
Company is raising fresh money
Shares are offered to everyone, not just existing shareholders
Can be:
IPO (Initial Public Offer) → first time listing
Follow-on/Public Offer → already listed company raising more funds
Example:
When a company like MTN Nigeria did its public offer, any Nigerian investor could apply
Key Features:
Open to all investors
Fixed offer price (e.g. ₦10 per share)
You apply during the offer period
Shares are later credited to your CSCS account
2. Rights Issue (Rights Offer)
A rights issue is ONLY for existing shareholders.
What it means:
Company gives you the right (not obligation) to buy more shares
Usually at a discounted price
Based on how many shares you already own
Example:
If you own shares in United Bank for Africa:
You may get something like:
“1 new share for every 4 shares you own at ₦8”
You can:
✅ Buy your rights
✅ Sell your rights
❌ Ignore (but you’ll be diluted)
Key Features:
Only existing shareholders qualify
Discounted price
Helps company raise capital without going to outsiders first
3. Main Difference (Straight Comparison)
Feature
Public Offer
Rights Issue
Who can buy
Anyone
Existing shareholders only
Price
Market/fixed
Usually discounted
Ownership impact
New investors enter
Existing investors maintain %
Access
Open
Restricted
4. Where Can You Buy Them?
In Nigeria, both are typically done through:
1. Stockbrokers
Traditional brokers (forms or online)
2. Issuing Houses / Registrars
You may apply directly through:
Banks
Investment firms
5. Can You Use Your Broker App? (Important)
👉 Yes—but with conditions
For Public Offers:
Some platforms like:
Bamboo
Trove
👉 Usually DO NOT support Nigerian public offers directly
Instead, use:
Local brokers (e.g. Meristem, ARM, Stanbic IBTC)
For Rights Issues:
Your broker does NOT automatically buy it for you
What happens:
Rights are credited to your CSCS account
You must:
Fill a rights subscription form OR
Instruct your broker to act
6. Very Important (Most People Miss This)
For rights issues:
👉 If you do nothing:
You may lose the opportunity
Your ownership gets diluted
7. Practical Advice for You
Since you already invest:
Always check your email + CSCS alerts
When you see:
“Offer”
“Rights Issue”
“Allotment”
👉 Take action immediately
8. Simple Analogy
Public Offer = “Company invites everyone to join”
Rights Issue = “Company asks existing members to add more money first”
If you want, I can:
Show you a real Nigerian rights issue breakdown (with numbers)
Or guide you on how to subscribe step-by-step using your broker