Definition
Face Value vs Market Value
Face value is the nominal accounting value of a share fixed by the company, while market value is its current trading price set by demand and supply.
Face value (par value), commonly ₹1, ₹2, ₹5, or ₹10 in India, is the base value on which dividends and corporate actions like splits and bonuses are reckoned. It rarely changes (except in a split) and has little to do with the share's worth.
Market value is what the stock actually trades at on the NSE/BSE, driven by earnings, growth, and sentiment, and can be many times the face value. Confusing the two is a common beginner error; a low face value does not make a stock 'cheap'.
Related terms
- Face ValueFace value (par value) is the nominal value of a share as stated by the company, often ₹1, ₹2 or ₹10.
- Book ValueBook value is a company's net worth on its balance sheet, total assets minus total liabilities, representing what shareholders own on paper.
- Bonus vs Split (Difference)A bonus issue gives free extra shares from reserves, while a stock split divides existing shares into more shares with a lower face value, neither changes total value.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.