Face Value and Market Value

A company's capital is subdivided into shares.

So if a company's capital is Rs 10 crore (Rs 100 million), that could be divided into 1 crore (10 million) shares of Rs 10 each.

If the company has divided its capital into shares of Rs 10 each, then Rs 10 is called the face value of the share.

When the share is traded in the stock market, however, this value may go up or down depending on demand and supply for the stock. The value of a share in the market at any point of time is called the price of the share or the market value of the share.

So the share with a face value of Rs 10, may be quoted at Rs 55 (market value higher than the face value), or even Rs 9 (market value lower than the face value).