What is Face Value of Share?

Imagine a share like a movie ticket. The face value is the printed price on the ticket, ₹100. But when the movie gets super hit (like a stock going up), people are ready to pay ₹500 for that same ticket! That ₹100? That’s the face value. That ₹500? That’s the market value. So yeah, face value is just the company’s original sticker price, not what people are buying it for today. So here will understand "what is Face Value of share?"

About Face Value of Share

When you hear the term face value of a share, you might think it’s the price of the share you see on apps like Groww or Zerodha. But that’s not true. Face value (also called par value) is the original price of a share set by the company when it issues shares for the first time.

It has nothing to do with the current market price. Imagine it like the MRP printed on a biscuit packet. You might buy it for more or less, but the printed price stays fixed. That printed price? That’s face value.

In simple words, Face Value is the value written on a share when it's created by the company. It is used in company records, IPO pricing, dividend calculations, and stock splits. It usually stays the same unless the company officially changes it.

Face Value Vs. Share Price

Type	Meaning	Decided By	Example
Face Value	Printed value of the share	The Company	₹10 (set by Reliance)
Market Value	Price at which you buy/sell in the market	Buyers & Sellers	₹2,500 (changes daily)

Note: Market value changes daily based on demand and supply. Face value stays fixed.

Formula to Calculate Face Value of Share

The face value of a share can be easily calculated using the given formula :

Face Value of Share = Equity Share Capital / Number of Outstanding Shares

Equity Share Capital is the total money a company collects by selling its shares to people. Like you, me, and other investors. This money helps the company grow, launch new products, pay bills, and stay ahead of the competition.

Outstanding Shares are the total number of shares that the company has given to investors. Including the public, promoters, and institutions. You can check this number easily on the company’s website, or on stock market apps like Groww, Zerodha, or Moneycontrol.

For Example,

Equity Share Capital = 1000
Outstanding Share Numbers = 10

Therefore face value of share = 1000/10 = 100

Also, read: How to check IPO Allotment Status in Groww App

Why Face Value Actually Matters?

You might think face value is just a random number printed on a share. But no, it actually helps investors, companies, and analysts make smart money moves. Here’s why face value is important:

Used in Financial Ratios: Face value is used to calculate things like earnings per share (EPS) and other money-related ratios.
Tells Us Initial Capital: It shows how much money the company collected when it first sold its shares.
Shows Starting Net Worth: It helps in knowing the company’s basic worth when it was just getting started.
Useful in Stock Splits: If a company gives extra shares (like a 2-for-1 deal), face value helps decide how that works.
Helps Find Share Premium: If the market price is ₹500 and the face value is ₹10, then ₹490 is called the share premium. That’s the extra value investors are paying.
Used to Calculate Dividends: When companies give profits to shareholders, they usually calculate it as a percentage of face value, not market value.

How to Check Face Value?

Here’s how:

Go to NSE/BSE websites.
Search for the company.
Look for Face Value in the stock info.
Or use apps like Groww, Zerodha, and Moneycontrol.
You can also check the company’s annual report.

Conclusion

In conclusion, Face value is the printed price of a share, set by the company at the beginning. It stays fixed, while market value changes every day. Dividends, IPO pricing, and stock splits all depend on face value. Don’t judge a share just by its face value. It's only one part of the story.