Face Value: Meaning, Definition & Indian Stock Market Examples

The nominal value of a share set at issuance — typically ₹1, ₹2, or ₹10.

Disclaimer: This article is for educational purposes only and does not constitute SEBI-registered investment advice. Consult a SEBI-registered investment advisor before making investment decisions.

What is Face Value?

Face Value (also called Par Value) is the nominal value of a share as stated in the company's memorandum of association. It is the base value for accounting purposes — dividends declared as a percentage are on face value, not market price. In India, common face values are ₹1, ₹2, ₹5, and ₹10.

Face Value — Indian Stock Market Example

Most large-cap Indian companies have face value of ₹1 or ₹2 after multiple stock splits. Reliance Industries has a face value of ₹10. MRF has never split its shares and has face value of ₹10 with a market price above ₹1.2 lakh — the highest share price on NSE.

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Frequently Asked Questions about Face Value

Why does face value matter?

Dividends declared as a percentage are calculated on face value. "200% dividend" on a ₹1 face value stock means ₹2 per share — not 200% of market price. Knowing the face value helps correctly interpret dividend announcements.

Does face value affect the stock's investment value?

No. Face value has no direct bearing on a stock's investment quality, earnings, or intrinsic value. It is purely an accounting convention. Two companies with the same earnings but different face values should be evaluated on identical fundamental metrics like PE and ROE.

Related Terms

Stock Split

Dividing existing shares into multiple shares — reduces price per share, increases count.

Bonus Share

Free additional shares issued to existing shareholders from company reserves.

Earnings Per Share

Net profit divided by total shares — profit attributable to each share.

Dividend

Cash distribution from company profits to shareholders.

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