The firm's stock dropped 3.8 per cent on the New York market yesterday on the news - which brings its total fall for 2008 to 11 per cent so far.
Citi has been forced to write down $10 billion of financial products in the last quarter alone due to its exposure to the now-collapsed US sub-prime market.
Thousands of jobs have also been cut at the bank recently.
Analyst at Oppenheimer & Co Meredith Whitney, told Bloomberg: "We believe Citi needs to raise an additional $10-$15 billion or sell several hundreds of billions worth of assets in order to truly shore up its capital position.''
Commenting on the new rights issue, former shareholder William Fitzpatrick added: "We were hoping they wouldn't have to go the equity markets like thisâ¦this was extremely disappointing."
Citi has sold equity to the sovereign wealth funds of the United Arab Emirates, Singapore and Kuwait, following the onset of the credit crunch last year.
A total exceeding $30 billion has been raised by the firm in this way.