Lloyds Banking Group has asked its shareholders to dig deep in a record-breaking rights issue announced last week.

The group, already 43.5%-owned by the taxpayer and with a stock market value of £23.5 billion, has asked its 2.8m private investors, as well as institutions, to buy additional shares worth £13.5 billion.

The bank will also swap £7.5 billion of debt for capital that can convert to shares if its finances deteriorate, raising a total of £21 billion.

The move has allowed it to stay out of the government’s expensive asset protection scheme (APS), which guarantees toxic assets. The new shares will be priced on November 24 at whichever is higher — 15p, or a 38% to 42% discount to the price of the old shares. The shares closed at 85p on Friday, so the discount would price them at 53p to 49p.

However, advisers are divided about whether or not investors should take up the new shares. Nick Raynor of The Share Centre suggests a wait-and-see approach. “There’s too much uncertainty to decide now. We expect the stock to stagnate until all the details of the rights issue emerge,” he said.

On the other hand, Richard Buxton, head of UK equities at Schroders, said: “Against our current reasonably cautious outlook we do believe this is a positive move by Lloyds and represents an attractive opportunity to increase exposure to the shares.”

Chris White, UK equities fund manager at Threadneedle, is keen to take up the new shares on top of his existing 0.3% holding. He said: “The disposals of Cheltenham & Gloucester and Intelligent Finance along with the Lloyds Scottish branches should not be too onerous.”

The rights issue is subject to a vote by existing ordinary shareholders that will be held at a general meeting in Birmingham on November 26.

Each share will be worth one vote. There are a total of 12 resolutions to be passed, requiring either 50% or 75% of votes cast to be in favour, depending on the individual resolution.

Bank stocks have performed well this year, though some think they have gone too far too fast. The FTSE banking sector is up 142% since March and 28.9% since the start of the year.

Crispin Odey, the hedge fund manager who has made millions of pounds betting on British banks, sold part of his stake in Barclays last week. It follows last month’s move by the Qatar Investment Authority to cash in £1.3 billion of its investment in the bank.

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