What Is the Face Value of a Share?

Published on June 10, 2026 | 7 min read

Key Takeaways

Face value is the original value assigned to a share by a company.
It is also known as par value or nominal value and remains fixed unless changed through a stock split.
It is different from the market price of a stock.
Dividends are often declared as a percentage of face value.
A lower face value does not mean a stock is cheaper.
Common face values in India are ₹1, ₹2, ₹5, and ₹10.

You may have read the news that XYZ company declared a 300% dividend, or occasionally the dividend intimation emails tell that the respective company will distribute a 500% dividend. At first glance, it may sound like the shareholder is getting 3 times their present share value as a dividend.

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But that's not how dividends work. It is declared as a percentage of the share’s ‘face value’. Even though a company’s share might be trading in the thousands, its face value is usually ₹1, ₹2 or ₹10. So, when a company whose share is currently trading at ₹1200 with a face value of ₹10 declares a 500% dividend, the dividend is actually ₹50. Let’s understand all the aspects of face value here.

Face value, also known as par value or nominal value, is the original value assigned to a share by a company when it is issued. It is the value mentioned in the company's share certificate and remains fixed unless the company decides to change it through a corporate action such as a stock split or bonus issue. The face value remains constant and does not change daily like market price.

Example Suppose a company issues shares with a face value of ₹10 each.

Face Value = ₹10

Issue Price = ₹10 (if issued at par)

Years later, if the share trades at ₹1,500 in the stock market, its face value will still remain ₹10 unless the company undertakes a stock split.

Face Value vs Market Value vs Book Value

Many investors get confused between face value, market value and book value. Also, beginners may get confused as to which one to refer to when. These three are completely different.

Basis	Face Value	Book Value	Market Price
Meaning	Original value assigned by the company	Net worth per share	Current stock price on the exchange
Changes frequently?	No	Yes (with profits/losses)	Every second during market hours
Determined by	Company	Company's assets and liabilities	Demand and supply
Used for	Dividends, stock splits, share capital	Valuation analysis	Buying and selling shares
Example	₹10	₹500	₹2,500

A company's share can have a face value of ₹10 and a market price of ₹2,000 at the same time.

Why Is Face Value Important?

Although face value does not indicate whether a stock is cheap or expensive, it plays an important role in several corporate actions.

Dividend Calculation

Companies often declare dividends as a percentage of face value. For example:

Face Value = ₹10
Dividend Announced = 200%
Dividend received per share:
200% × ₹10 = ₹20 per share This is why understanding face value helps investors calculate actual dividend payouts.

Stock Splits

Face value changes when a company undertakes a stock split. For example, Before the stock split,

Face Value = ₹10
Number of Shares = 100
After a 1-for-5 stock split,
Face Value = ₹2
Number of Shares = 500 The overall investment value remains unchanged.

Bonus Shares

Face value is also used when companies issue bonus shares to existing shareholders. The ratio of bonus shares is determined based on the company's reserves and share capital, which are linked to face value.

Accounting Purposes

Face value forms part of a company's share capital shown in the balance sheet. For example: If a company has 1 crore shares with a face value of ₹10, Share Capital = 1 crore × ₹10 = ₹10 crore

Can Face Value Change?

Yes. A company can change the face value of its shares through a stock split or reverse stock split. Example of a Stock Split Suppose a company has,

Face Value = ₹10
Market Price = ₹2,000

After a 1:2 stock split Face Value becomes ₹5 Market Price may adjust to around ₹1,000 Number of shares doubles However, after a stock split, the total value of the investor's holdings remains the same.

Face Value vs Issue Price

Face value and issue price are not always the same.

Face Value - The nominal value assigned to the share by the company
Issue Price - The price at which the company offers shares to investors.

For example: Face Value = ₹10 Issue Price = ₹150 The additional ₹140 is called the securities premium. Many IPOs are issued at a premium to face value.

Face Value vs Book Value

Investors also confuse face value with book value.

Face Value - The nominal value assigned to the share by the company.
Book Value - The net worth of a company divided by the number of outstanding shares. Book value reflects the company's assets and liabilities, while face value is largely an accounting figure.

You can find a company's face value on, Stock exchange websites Company annual reports Brokerage platforms The information is usually available under the stock details section.

Common Face Values in India

Indian companies commonly issue shares with face values of ₹1, ₹2, ₹5 or ₹10 There is no rule that every company must have a face value of ₹10. Many large companies have reduced their face values through stock splits over time.

Does a Lower Face Value Mean a Cheaper Stock?

No. This is one of the biggest misconceptions among investors. Consider the following:

Company A	Company B
Face Value: ₹1	Face Value: ₹10
Market Price: ₹2,000	Market Price: ₹500

Although Company A has a lower face value, its stock is actually more expensive in terms of market price. Investors should evaluate a stock based on factors such as earnings, growth prospects, valuation, and financial health rather than face value alone.

Face value is the nominal value assigned to a share when it is issued by a company. While it does not determine a stock's market price or investment attractiveness, it plays an important role in dividend calculations, stock splits, bonus issues, and accounting.

For investors, understanding face value can help decode corporate announcements and better interpret information related to dividends and share capital. However, when evaluating whether a stock is worth buying, factors such as business quality, earnings growth, valuation, and financial strength are far more important than the face value of the share.

Frequently Asked Questions

Face value is the original value assigned to a share by a company when it is issued. It is also known as par value or nominal value.

Is face value the same as market price?

No. Face value is fixed by the company, whereas market price changes continuously based on demand and supply.

Why is face value important?

Face value is used for calculating dividends, stock splits, bonus issues, and a company's share capital.

Can face value change?

Yes. Companies can change face value through stock splits or reverse stock splits.

You can find it on stock exchange websites, company annual reports, brokerage platforms, and financial websites. Does a lower face value mean the stock is cheaper? No. A stock's price depends on its market value, not its face value.

What are the common face values of shares in India?

The most common face values are ₹1, ₹2, ₹5, and ₹10 per share.

About Author

Pradnya Surana

Sub-Editor

is an engineering and management graduate with 12 years of experience in India’s leading banks. With a natural flair for writing and a passion for all things finance, she reinvented herself as a financial writer. Her work reflects her ability to view the industry from both sides of the table, the financial service provider and the consumer. Experience in fast paced consumer facing roles adds depth, clarity and relevance to her writing.