Question:medium

Par value system of shares is

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Remember that SEBI let companies fix their own face value, so the old compulsory par value rule does not bind Indian companies anymore.
Updated On: Jul 13, 2026
  • no more applicable in India
  • applicable in India
  • applicable in India in selected cases
  • none of these
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The Correct Option is A

Solution and Explanation

Step 1: Understanding the Concept:
The par value (or face value) of a share is a fixed rupee value stamped on the share, separate from its market price. The question asks whether this fixed par value system still holds in India.

Step 2: Key Formula or Approach:
Recall the SEBI reform that freed companies from a single mandatory face value. Once a firm can choose its own face value for a new issue, the old rigid par value system no longer binds it.

Step 3: Detailed Explanation:
Before this reform, Indian companies mostly issued shares at a standard face value like Rs 10 or Rs 100, and the "par value" idea was central to how shares were priced and compared. After SEBI's change, companies can set the face value at Rs 1, Rs 2, Rs 5, Rs 10, or any figure the board picks. This means the strict, uniform par value rule is not in force anymore. The other choices, "applicable in India" and "applicable in India in selected cases", both wrongly assume the old fixed system still binds companies today.

Step 4: Final Answer:
The par value system, in its old compulsory form, is no more applicable in India.
\[ \boxed{\text{no more applicable in India}} \]
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