What It Means
Face value is the fixed nominal value a company assigns to each share when it's incorporated, printed on the original share certificate and used for accounting and dividend-percentage calculations. It has nothing to do with what the share actually trades for in the market.
Example
BSE Ltd's shares carry a face value of ₹2 each, while the stock traded at around ₹6,996.5 just before its May 2025 bonus issue. A company can announce a 20% dividend and that percentage is calculated on the ₹2 face value, not on the market price.
Warning
A low face value doesn't make a stock cheap, and a high face value doesn't make it expensive. Judge a stock by its market price and valuation, not the face value printed on the certificate.
Related Terms
- Stock Split: the corporate action that actually changes a share's face value
- What Is a Bonus Issue?: why a bonus issue leaves face value untouched, unlike a split