Face Value, Market Value, Book Value – What Do They Really Mean?
Learn the real difference between face value, market value, and book value with simple examples.
If you have ever looked at stock prices or company reports, you might have come across terms like face value, market value, and book value. They sound technical, but the ideas behind them are actually simple. Let’s break them down with examples of Indian companies we all know — Reliance, Infosys, and HDFC Bank.
1. Face Value – The Printed Price
Face value is the price written on the share when the company first issues it. It is a notional number, usually ₹1, ₹2, ₹5 or ₹10 in India.
Example:
Reliance Industries has a face value of ₹10.
Infosys has a face value of ₹5.
This number is mostly used when companies declare dividends or split shares. It doesn’t change with time unless the company itself decides to revise it.
Think of face value like the “MRP” printed on a packet — the actual selling price may be very different.
2. Market Value – The Price You See on NSE/BSE
Market value is simply the price at which a stock trades in the stock market — the price you and I see when we open our trading app. It reflects what investors are willing to pay today. It changes every second depending on demand and supply.
Example (as of recent data):
Reliance trades at around ₹1,420 per share.
Infosys trades at about ₹1,440 per share.
Notice the gap? Reliance’s face value is ₹10, but people are buying and selling it at ₹1,420. That’s because market value reflects what investors believe about the company’s business and future.
3. Book Value – What the Balance Sheet Says
Book value is the company’s net worth divided by the number of shares. In other words, if the company sold all its assets and paid off its debts, what would be left for each shareholder?
Example:
HDFC Bank’s book value per share is around ₹682.
Its market value per share is close to ₹1,990.
So, the market is valuing HDFC Bank at nearly three times its book value, because investors expect strong profits and growth in the future.
Putting It All Together
Take Reliance as a case:
Face Value: ₹10
Book Value: ₹623
Market Value: ₹1,420
Three different numbers for the same share!
Dividends are linked to face value.
Balance sheets tell you the book value.
The stock market shows market value.
Why Should You Care?
Face value is useful for understanding dividends and IPO pricing.
Book value helps check if a stock is undervalued or expensive (many investors use the Price-to-Book ratio).
Market value tells you what you will actually pay or get when you trade.
Smart investors don’t just look at one number. They look at all three in context. For instance, a stock trading far above book value might still be justified if it is a high-growth company. But if a stock trades below book value, it could signal undervaluation — or hidden trouble.
Final Thought
Face value, market value, and book value are like three lenses to look at the same company. One shows the original price tag, another shows the accountant’s reality, and the last one shows the crowd’s verdict.
When you see headlines about companies like Reliance, Infosys, or HDFC, try asking yourself: Which value are they talking about? Chances are, understanding this small detail will make you a smarter investor.