ADIB: What to do with the tradable rights?

Here is what you need to know about Abu Dhabi Islamic Bank – Egypt’s capital increase and what to do with its tradable rights.

19 November 2025
Amr Hussein Elalfy

In this note, we lay down the story behind Abu Dhabi Islamic Bank – Egypt’s [ADIB] EGP3bn capital increase and the different options available to you as an existing shareholder or as a prospective shareholder, whether you should sell your rights or exercise them. And here you are some dates to keep in mind:

• Rights trading: From 19 November through 1 December 2025, after which they will expire. Thus, you need to make up your mind during that period.
• Subscription to the capital increase: From 19 November through 4 December 2025 for those who are rights holders.

But let’s first remember what the stock exchange is important for.

A marketplace for everyone

The stock exchange is often looked at as an “exit market” when existing shareholders of companies sell their shares to new shareholders (investors) often at a premium to their original cost of acquisition. However, the stock exchange is not only a marketplace where sellers can dispose of their shares. In fact, the most important role of a stock exchange is for companies to raise required capital from existing shareholders or investors at large to support their growth.

Thus, the stock exchange is indeed a marketplace for everyone: a marketplace for “existing” shareholders to raise liquidity by selling their “existing” shares and a marketplace for companies to raise capital by selling “new” shares to “new” investors.

Two examples

Let’s take two quick examples.

If a privately-held company wants to raise capital, it can do so through an initial public offering (IPO) by issuing new shares to investors (potential new shareholders). This is known as a primary offering, similar to what Bonyan for Development & Trade [BONY] did in its IPO when it raised EGP250mn as part of the IPO process.

On the other hand, if a listed company wants to raise capital, it can do so by calling on its existing shareholders to shore up new capital to fund their operations and/or reduce debt, for example. This is what Abu Dhabi Islamic Bank Egypt [ADIB] is doing today.

What about ADIB’s tradable rights?

What happened?

ADIB is currently undergoing an EGP3bn capital increase by issuing 300mn shares at a par value of EGP10 a share in addition to EGP0.10 a share as issuance fees. All in all, the bank will potentially raise a total of EGP3.03bn at the end of the day if the capital increase is fully covered. Thus, ADIB will be raising its paid-in capital from a current EGP12bn (1.2bn shares at a par value of EGP10/share) to EGP15bn (1.5bn shares at a par value of EGP10/share).

Know your options: Who gets what?

Each group of investors (existing or new ADIB shareholders) will have several options to consider.

Existing shareholders

This capital increase was available for ADIB’s existing shareholders at the end of 16 November 2025 at a ratio of 1-to-4 (300mn “new” shares for 1.2bn “existing” shares). This means if you were a shareholder as of that date and say you owned 100 shares, today you would have the same 100 shares plus 25 rights that you can use to subscribe to 25 new shares.

Available options

These existing shareholders have two options:

1. Exercise the right to subscribe to the capital increase, especially if you think ADIB’s stock is undervalued and you believe in the long-term value of the bank’s franchise.
2. Sell the right for any particular reason, such as:

• You do not have enough cash to shore up for the capital increase.
• You want to raise liquidity by partially exiting your investment in ADIB.
• You think ADIB’s stock is overvalued.

Investors (new shareholders)

An ADIB existing shareholder who decides to forgo the opportunity to participate in the bank’s capital increase can sell the rights in the market, where either other existing ADIB shareholders or investors who are non-shareholders would buy them.

Available options

These investors have two options:

1. Exercise the right to subscribe to the capital increase, assuming they think ADIB’s stock is undervalued and they believe in the long-term value of the bank’s franchise.
2. Sell the right if its market price rises beyond their acquisition cost so that they can generate a positive return.

All options in charts

To make things even more crystal clear, we need to consider the rights as a call option that grows in value as the underlying stock (ADIB in this case) grows in value.

Source: Rumble Research

Key price levels to keep in mind

EGP/share (EGP/right)	ADIB (stock)	ADIBr (right)	Subscription price
ADIB’s stock price adjusted for the rights (16 Nov 2025)	24.82	14.72	10.10
ADIB’s stock price (18 Nov 2025)	25.30	15.20	10.10
ADIB’s target price (Rumble)	36.00	25.90	10.10

Source: Rumble Research

Now what?

Given that ADIB is an open fundamental recommendation that we have, we believe the stock is undervalued. Our latest target price based on a 1.2bn share count was EGP42.5 a share. This is a pre-capital increase valuation. Assuming the capital increase is fully covered, which we think it will be, then the post-capital increase target price is now EGP36 a share, implying a 42% upside from the latest closing price of EGP25.30 a share.

Recommended actions

We maintain our INVEST rating on ADIB, which also means we recommend for existing shareholders to subscribe to the capital increase. This is in view of its above-average growth rate and potential windfall from its upcoming capital increase. We believe the capital increase will help grow the bank’s balance sheet and eventually drive growth and profitability higher further.

Meanwhile, keep the following in mind:

If the price of ADIB’s	is	The price of ADIB’s	then
For ADIB existing shareholders
right + 10.10	lower than	stock	Buy the right then subscribe
right + 10.10	higher than	stock	Sell the right and buy the stock
For other investors
right + 10.10	lower than	stock	Buy the right then subscribe
right in the market	higher than	right (at acquisition)	Either sell the right at a profit or keep it to  subscribe
right in the market	lower than	right (at acquisition)	Keep the right then subscribe

Note: In any case, if the market price of the right rises higher than the price at which you acquired it, you can sell it in the market at a profit.

Source: Rumble Research

 

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