Share capital

The nominal value of shares issued, and one of the least informative numbers in an Indian balance sheet. A company with 50 crore shares of ₹2 face value shows ₹100 crore of share capital regardless of what the shares are worth or what was paid for them.

Anything paid above face value on issue goes to the securities premium account inside reserves, which is why share capital and the money actually raised are almost never the same figure.

Its uses are narrow and real. Dividing share capital by face value gives the exact share count on the balance sheet date, which is a useful cross-check on the weighted average used in earnings per share. And a change in the line between two years means shares were issued or extinguished, which sends you to the equity movement statement to find out how and to whom.

A small number with one honest use.

The money raised is somewhere else entirely. Securities premium holds it, and the two lines together tell you what the shareholders actually paid for the company they own. A firm with ₹100 crore of share capital and ₹4,200 crore of premium raised ₹4,300 crore from investors over its life, which is a different history from one with the same equity built entirely out of retained profit. Neither is better in itself. What they say is where the funding came from, and a company that has repeatedly gone back to the market for capital while reporting growth has been growing on other people's money rather than on its own earnings.