Term · Capital Measures & Financing
Subscription ratio
In briefThe subscription ratio indicates the ratio at which existing shareholders can subscribe to new shares, for example 3:1 or 5:2. For small caps it determines how much the share count, and hence potential dilution, increases.
Definition
The ratio at which existing shareholders can subscribe to new shares, e.g. 3:1 or 5:2.
How it is calculated
Formula. Subscription ratio = number of old shares ÷ number of new shares per subscription package.
Why it matters for small caps
In the small-cap segment the subscription ratio determines how much the share count, and hence potential dilution, increases.
Common misreadings
- It is often read only formally; together with the subscription price and TERP it shows the real economic effect.
In the process
Frequently asked
What is the subscription ratio?
It defines how many old shares entitle the holder to subscribe to one new share. From this follows each shareholder's entitlement.
How do you read the subscription ratio correctly?
You consider it together with the subscription price and the theoretical price after the issue (TERP). Only then does the actual economic effect become apparent.
Why is the subscription ratio alone not enough?
Read purely formally, it says little about the value effect. Only in combination with price and TERP does the dilution become tangible.
Related terms
Sources
Primary
Bundesministerium der Justiz – Aktiengesetz (AktG)
https://www.gesetze-im-internet.de/aktg/
https://www.gesetze-im-internet.de/aktg/
Methodology
EUR-Lex – EU-Prospektverordnung, Verordnung (EU) 2017/1129
https://eur-lex.europa.eu/eli/reg/2017/1129/oj
https://eur-lex.europa.eu/eli/reg/2017/1129/oj
Education only, not investment advice. Ranges and thresholds are didactic orientation values, not an official standard.