What is Face Value in an IPO? (2024)

FAQs

What is Face Value in an IPO? ›

The face value represents the per-share price, determined by dividing the total number of shares to be issued by the total outstanding equity shares. For instance, if a company with 1000 outstanding equity shares plans to issue 100 new shares, the face value per share would be 10 (1000/100).

Face value is the dollar value as stated by the issuer of any security when issuing. The nominal value is the fundamental concept of the stock market. This value remains fixed when publicly traded firms offer stocks through the IPOs (Initial Public Offerings).

The most important difference between the face value of a bond and its price is that the face value is fixed, while the price varies due to outside influences. The amount set for face value remains the same until the bond reaches maturity.

The premium is the amount charged over the Face Value. Conversely, if shares are offered at a price lower than Face Value, then the issue is at a discount. The difference between the Face Value and the Offer Price is the discount.

Let us say that a company goes public at face value of Rs 10. It may have a market value of Rs 50. However, that is not always the case. In case of certain stocks, the face value may be higher than the market value.

What is Face Value in IPO? The face value, also known as par value, is the fixed value of the share decided by the company and later on it comes out with an initial public offering (IPO). The face value can be any value like INR 2, INR 10, or INR 1000.

1. : the value indicated on the face of something (as a coin, bill, bond, or insurance policy) 2. : the apparent worth or significance.

It's important for investors, especially new investors, to understand how face value relates to stocks and bonds and how it differs from market value. Face value can help investors better compare stock and bond options and assess profits.

Face value has its importance in the stock market, it helps to calculate the market value of the stock, calculate the investments and returns and also to calculate premiums. The face value of stocks may also be subject to change as a result of some corporate actions like the stock splits.

The purchase price of the bond is lower than its face value. The difference between the face value and the purchase price is called the discount.

Is face value the selling price? ›

In finance, face value refers to the nominal or dollar value of a security stated by the issuer. This is also known as "par value" or "par," typically about bonds. Face value differs from market value, which is the security price based on supply and demand.

The corporations are formed with a face value of INR 10, but most have a face value of INR 100 or INR 1. SEBI, which governs the requirements for listing a public limited company on a stock exchange, has established a minimum face value of INR 1.

It can be any amount, but it's often close to zero. For a bond, the face value is the amount of money that you're owed when the bond comes to maturity. So, for example, you might buy a bond with a face value of $1,000 for $800, and when it matures in three years, you can cash it in for $1,000.

Typically, the average P/E ratio is around 20 to 25. Anything below that would be considered a good price-to-earnings ratio, whereas anything above that would be a worse P/E ratio. But it doesn't stop there, as different industries can have different average P/E ratios.

Can the share split be anything less than INR 1? No, A share split cannot happen if the current face value remains Rs 1.

In Mathematics, face value is the actual value of the digit in a number. For example, if 567 is a number, then the face value of 6 is 6 only, whereas its place value is tens (i.e. 60). Thus, for any number, having a two-digit, three-digit or 'n' number of digits, every digit will have a place value and a face value.

: as true or genuine without being questioned or doubted. After all his lying, nothing he says now should be taken/accepted at face value.

The mean (aka the arithmetic mean, different from the geometric mean) of a dataset is the sum of all values divided by the total number of values. It's the most commonly used measure of central tendency and is often referred to as the “average.”

phrase. If you take something at face value, you accept it and believe it without thinking about it very much, even though it might be untrue.

the value printed on the face of a stock, bond, or other financial instrument or document.