What Is Face Value of Share in Stock Market – Important Things To Know

order to make wise choices. Face value, also referred to as "par value," is one such phrase. The nominal value of a share of stock that is printed on its certificate is known as face value. Everyone who invests in the stock market should be aware of this crucial aspect. Typically, a share's face value is a small sum, like Rs. 10 or Rs. 100. This is the price that the company put on each share when it issued them. The face value affects both the amount of capital that a company can raise through the issuance of shares and is crucial for accounting purposes.

Read This Blog -: Reclaiming Your Investments: A Guide to Recovering Unclaimed Dividends in the Indian Market

For instance, a company will raise Rs. 1,000,000 in capital if it issues 10,000 shares with a face value of Rs. 10 each. The face value of each share is multiplied by the number of shares issued to arrive at this figure. It is crucial to remember that a share's face value does not always correspond to its market value.

In the stock market, supply and demand factors work together to determine a share's market value. Depending on a number of variables, including the company's financial performance, growth potential, and general market conditions, the market value may be higher or lower than the face value of the share.

The face value of a share may alter over time, which is another crucial point to remember. Depending on a number of variables like inflation, changes in the company's financial situation, or shifts in market conditions, companies may increase or decrease the face value of their shares.

Investors shouldn't solely rely on the face value of a share when making investment decisions, even though it is crucial for accounting purposes and determining how much capital a company can raise. Investors should instead take into account other aspects like the company's financial performance, the potential for growth, and general market conditions.

Understanding the procedure for reclaiming unclaimed shares and dividends is a crucial component of stock market investing. Shares and dividends that have not been claimed by investors for a predetermined amount of time are transferred to the Investor Education and Protection Fund (IEPF).

The Indian government established the IEPF as a fund to advance investor education and safeguard investors' interests. Investors can request unclaimed shares or dividends from the IEPF. To claim these shares, though, there are a few formalities and conditions that must be met.

Investors should first determine their eligibility before attempting to claim unclaimed shares or dividends. Investors had to be the legitimate shareowner or dividend recipient in order to qualify for the offer. Investors must also have valid proof of ownership or entitlement. Investors can proceed with the claim process after being informed of their eligibility. The first step is to submit a claim form to the IEPF along with the necessary paperwork. On the IEPF website, you can find the claim form and a list of needed paperwork.

Investors will receive a confirmation from the IEPF once they have submitted the claim form and all necessary paperwork. The shares or dividends will then be transferred to the investor's account after the claim has been verified by the IEPF and determined to be valid.

It is significant to remember that the IEPF has a deadline for claiming unclaimed shares or dividends. Investors have seven years from the date that their shares or dividends became due for transfer to the IEPF to claim their shares or dividends.

Conclusion

The face value of a share is an essential component of stock market investing that every investor should comprehend, to sum up. It is crucial for accounting purposes and calculating how much capital a company can raise through the issuance of shares. Nominal value is the price a share is given by the company when it is issued. However, it is significant to remember that a share's market value may be higher or lower than its face value, and when making investment decisions, investors should take other aspects like the company's financial performance, growth prospects, and general market conditions into account.

Investors should also be aware of the procedure for reclaiming unclaimed dividends and shares through the Investor Education and Protection Fund (IEPF), and they should make sure they are eligible and adhere to the necessary steps. In general, comprehending the face value of shares is a crucial step toward making informed stock market investment decisions

Location: India

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