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What is an ASX placement?

One of the ways a company can raise capital to fund its corporate goals is through a placement. This involved creating new shares and issuing them to select investors. But there are some important distinctions to be involved.

Typically in share placements, only sophisticated investors and institutional investors can be involved in the process. Despite this, it is actually the preferred method of raising capital for many ASX listed companies and it usually is not announced to the public until complete. 

So what is it?

A share placement on the ASX is a way for listed companies to raise capital via an offer of new shares to investors. However, due to the Corporations Act 2001, only sophisticated, professional or institutional investors can participate in placements. 

They are often accompanied by a share purchase plan (SPP) but companies can offer them separately. Doing a placement alongside a SPP allows retail investors access to the capital raising. A SPP gives retail investors the chance to increase their holding and for the company to raise further funds. These are usually capped at a certain amount per shareholder. 


Share placements have several advantages for companies because they can be conducted relatively quickly and are often far more extensive than subsequent share purchase plans to retail investors. 

As a placement is not a pro rata offer and does not require any offer to be made to the acquirer’s shareholders, it will have a dilutive effect on existing shareholders. This means investors' stake will be reduced and they will be entitled to less profit. Additionally, they are often sold at a discount to the current price and may see an equity fall accordingly. 

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Stakeshop Pty Ltd, trading as Stake, ACN 610105505, is an authorised representative (Authorised Representative No. 1241398) of Sanlam Private Wealth Pty Ltd (Australian Financial Services Licence No. 337927) ('Sanlam') and an authorised representative (Authorised Representative No. 1241398) of Airwallex Pty Ltd (Australian Financial Services Licence No. 487221) ('Airwallex'). Stake is not authorised by Airwallex under Airwallex’s AFSL to arrange for clients to be issued with securities as Airwallex is not authorised under its AFSL for this purpose. Stake is not authorised by Sanlam under Sanlam’s AFSL to arrange for clients to be issued with a non-cash payment facility as Sanlam is not authorised under its AFSL for this purpose. Stake SMSF Pty Ltd (‘Stake Super’) is not licensed to provide financial product advice under the Corporations Act. This specifically applies to any financial products which are established if you instruct Stake Super to set up a self managed super fund (‘SMSF’). When you sign up to Stake Super, you are contracting with Stake SMSF Pty Ltd who will assist in the establishment of a SMSF under a ‘no advice model’. You will also be referred to Stakeshop Pty Ltd to enable your trading account and bank account to be set up in order to use the Stake Website and/or App. Stakeshop Pty Ltd will also run marketing and promotions to you under. For more information about SMSFs, see our SMSF Risks page.The information on our website or our mobile application is not intended to be an inducement, offer or solicitation to anyone in any jurisdiction in which Stake is not regulated or able to market its services. At Stake and Stake Super, we’re focused on giving you a better investing experience but we don’t take into account your personal objectives, circumstances or financial needs. Any advice given by Stake is of a general nature only. As investments carry risk, before making any investment decision, please consider if it’s right for you and seek appropriate taxation and legal advice. Please view our Financial Services GuideTerms & ConditionsPrivacy Policy and Disclaimers  before deciding to invest on or use Stake or Stake Super. By using our website or service in any way, you agree to our Privacy Policy and Terms & Conditions. All financial products involve risk and you should ensure you understand the risks involved as certain financial products may not be suitable to everyone. Past performance of any product described on this website is not a reliable indication of future performance. Stake and Stake Super are registered trademarks in Australia.

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