The closing prices of Hanwha Aerospace and Hanwha Corp. shares are seen on an electronic board at Yonhap Infomax in Seoul, Friday, a day after Hanwha Aerospace announced its decision to issue 3.6 trillion won ($2.5 billion) worth of new shares. Yonhap

Hanwha Group is facing mounting criticism in the capital market following its unexpected decision on Thursday to issue 3.6 trillion won ($2.5 billion) worth of new Hanwha Aerospace shares at 605,000 won per share, nearly 15 percent lower than that day's stock price.

The nation's seventh-largest conglomerate attributed the largest-ever rights offering in the domestic stock market to its defense unit's plan to raise funds for global expansion, including the acquisition of Austal, an Australian shipbuilder with a shipyard in the United States.

However, investors and securities analysts have raised doubts about the necessity of the paid-in capital increase, which has significantly depreciated the shares of Hanwha Group affiliates, putting a damper on their recent bullish trend.

On Friday, Hanwha Aerospace's stock price closed at 628,000 won, down 13.02 percent from the previous session. The stock price of Hanwha Corp., the group's de facto holding firm, also fell 12.53 percent to 41,550 won.

Hanwha Solutions, Hanwha Systems, Hanwha Vision and Hanwha Ocean also remained bearish.

Hanwha Aerospace's K9 self-propelled howitzer / Courtesy of Hanwha Aerospace

The business group emphasized the need to act swiftly in response to the rapidly changing geopolitical landscape, citing rising defense costs in Europe and U.S. policies aimed at revitalizing its shipbuilding industry to maintain dominance in global maritime operations.

"Through this strategic large-scale investment, we will become a global top-tier company in the defense, shipbuilding, offshore engineering and aerospace sectors, taking a quantum leap forward in our corporate value," Hanwha Aerospace CEO Son Jae-il said.

The Financial Supervisory Service has also signaled its intent to allow the rights offering to support the company's investment plans.

However, analysts questioned the timing and necessity of the capital increase.

"It is regrettable that the company opted for a paid-in capital increase to raise funds needed over the next three to four years," Kyobo Securities analyst Ahn Yu-dong said.

Daol Investment & Securities analyst Choi Kwang-sik pointed out that Hanwha Aerospace could have raised sufficient funds without the rights offering, given that the company is expected to post 3.5 trillion won in operating profit this year and remain profitable in the coming years.

Speculation also emerged that the National Assembly's passage of a proposed revision to the Commercial Act on March 13 prompted Hanwha Aerospace to expedite the capital increase before the new law takes effect. The revised law expands corporate directors' fiduciary duties from applying solely to the company to also include shareholders.

Just a day after lawmakers passed the amendment, Samsung SDI also announced plans to issue 11.82 million new shares worth 2 trillion won.

"This Hanwha Aerospace monster deal is landing just a week after Samsung SDI's 2-trillion-won raise. That's a combined 5.5 trillion won in fresh paper hitting the market back-to-back, which is straight-up brutal for market absorption," said Park Sang-hyun, an analyst at SmartKarma, a Singapore-based investment research firm.

"There's no way the local market absorbs that smoothly without some major dislocations."