Securities premium

The amount received on issuing shares above their face value, held as a separate reserve inside equity.

A company issuing 5 crore shares of ₹2 face value at ₹240 records ₹10 crore as share capital and ₹1,190 crore as securities premium.

Company law restricts its use to specified purposes, so it's disclosed as its own reserve and kept out of general reserves.

For analysis it's the marker of externally funded equity. When the premium balance is large, shareholders wrote cheques. When the retained-earnings balance is large, the business did.

Face value is nominal, and the money is in the premium.