Par Value refers to the face value of a share or bond as stated in the companyís charter or on the security certificate. It represents the minimum price at which shares can be issued by a company and serves as a base value for accounting and legal purposes. In the case of bonds, par value is the amount the issuer agrees to repay at maturity, typically ?1,000 per bond in the Indian market.

In equity markets, the par value of shares is usually a nominal amount such as ?1, ?10, or ?100. This value does not necessarily reflect the shareís market price, which fluctuates based on supply, demand, and company performance. For example, a company may issue shares with a par value of ?10, but the same share might trade at ?500 in the stock market depending on investor sentiment and earnings growth. The difference between the issue price and par value is recorded as a securities premium in the companyís financial statements.

For bonds, par value acts as the principal amount. When a bond trades at a price above or below par, it is said to be trading at a premium or discount, respectively. Investors receive interest (coupon) payments based on this value until maturity, when the principal (par value) is repaid.

Understanding par value is essential for interpreting a companyís capital structure and for making informed investment decisions. While it holds limited significance in market pricing, it plays a crucial role in legal compliance, accounting records, and corporate governance. In modern finance, especially under SEBI regulations, companies often set a low par value to maintain flexibility in pricing future issues and to align with fair value accounting standards.