The face value of a stock, also known as the par value or nominal value, is the nominal of a security stated by the issuer. It is the value printed on the face of the stock certificate and represents the nominal or legal value of the security as determined by the issuer.

Here are a few key points about face value:

1. Legal Stipulation: Face value is a legal requirement and is typically set when a company issues its stock. It has no direct relation to the market value or the intrinsic value of the stock.

2. Fixed Amount: The face value is usually a fixed amount, often a small denomination, such as Rs. 10 or $1. This value is set to give the stock a legal or nominal value.

3. Bookkeeping Purpose: Face value is more relevant for bookkeeping and accounting purposes. It helps determine the initial capital of the company based on the number of shares issued and their face value.

4. Market Price vs. Face Value: The market price of a stock is determined by the forces of supply and demand in the open market. It may be higher or lower than the face value. For example, a stock with a face value of Rs. 10 may be trading at Rs. 100 in the market.

5. No Relationship to Market Performance: The face value has no direct correlation with the performance of the stock in the market. Investors primarily focus on market dynamics, financial performance, and other factors to assess the potential of a stock.

6. Stock Splits and Bonus Issues: Companies may adjust the face value through stock splits or bonus issues. In a stock split, the face value may be reduced, and additional shares are issued to maintain the total value of the investor’s holdings. In a bonus issue, additional shares are issued to existing shareholders without any change in the face value.

For example, if a company issues 1,000 shares with a face value of Rs. 10 each, the total face value of the shares would be Rs. 10,000 (1,000 shares * Rs. 10). However, if the market price per share is Rs. 50, the total market value would be Rs. 50,000 (1,000 shares * Rs. 50).

Investors need to distinguish between face value and market value when evaluating the worth of a stock. The face value is a nominal amount set by the company, while the market value reflects the current market price at which the stock is being bought and sold.