Britain’s best-known engineering company, which makes engines for airliners, military jets and ships, put out a statement on Saturday in response to media reports.
Rolls said that no decisions have yet been taken about the precise amount to be raised or by what means.
Analysts say that Rolls’ balance sheet is not in need of immediate funding.
The stock was down 8% at 165 pence at 1121 GMT.
They have shed 76% of their value this year and a tumble in recent weeks could make it even tougher to raise as much as 2.5 billion pounds from selling new shares.
The COVID-19 pandemic has hit Rolls hard as airlines pay the company according to how many hours its engines fly.
Yet given the low share price, Agency Partners analyst Nick Cunningham said raising new equity would be a last resort.
Rolls in August said it wanted to sell turbine blade maker ITP Aero and other assets to raise at least 2 billion pounds.
On Saturday it said it was also looking at equity or debt issuance.
Two senior industry executives who deal with Rolls said they believed a re-nationalisation or injection of state capital was possible, but that it was unclear whether the UK had an appetite for such a move.
Rolls was nationalised in 1971 and later privatised.
Britain owns a golden share in Rolls-Royce and the importance of the company to the UK’s military capability and its economy in terms of exports, has fuelled talk of a possible government rescue.
Planemakers Boeing and Airbus are increasingly concerned about the plight of the company, according to several sources.
In July, Morgan Stanley analysts warned that a second wave of COVID-19 infections could necessitate a government bailout.
The Financial Times newspaper reported that Rolls-Royce is in discussions with sovereign wealth funds including Singapore’s to help underpin any fundraising efforts, but UK consent may be needed under rules which limit foreign ownership of the company.
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