what's the difference between face value and share price?

When a publicly listed company in India offers its shares through an Initial Public Offering (IPO), it sets a face value for its shares, which represents the nominal value of the security. For example, a company may set the face value of its shares at INR 10 per share.

The face value, also known as the par value, is determined by the issuing company and is the value of the company as listed in its books and share certificates. It is fixed by the company when it decides to issue its shares and bonds. All companies issue shares and bonds at face value.

There are no specific criteria for setting the face value of shares, and it can vary from one company to another. However, it is typically set at a low value, such as INR 1 or INR 10 per share, to enable the company to issue a large number of shares and raise more capital.

On the other hand, the share price is the current market value of a share, which is determined by the supply and demand in the stock market. It represents the price at which a share is currently being traded on an exchange, and it can be higher or lower than the face value. It is important to note that the face value is not related to the market price of the share, which is determined by the supply and demand in the stock market. While the face value remains constant, the market price can fluctuate depending on various factors such as market conditions, company performance, and economic indicators