November 11, 2025
4 mins read
Partly Paid Shares are equity instruments where you pay only a portion of the share price upfront. The rest? You pay later, in installments, whenever the company makes a call. That flexibility helps if you don’t want to lock in large sums at once. But remember, the company will demand the remaining payments, and you can’t skip.
Even so, you get some shareholder rights like dividends and voting, usually linked to how much you’ve already paid. Understanding what are partly paid shares matters if you’re juggling cash flow yet still want to stay invested in long-term equity growth.
When you apply for Partly Paid Shares, you’re not paying the full face value or premium right away. Instead, you pay what’s called the “application money.” After that, the company decides when to call for the rest, and you’re expected to pay promptly.
Imagine a share priced at ₹100. The company could issue it with ₹25 upfront and split the remaining ₹75 into two instalments — maybe ₹35 and ₹40. Until you’ve cleared all payments, the shares remain “partly paid” and, fun fact, they often trade separately on the exchange under a different ticker.
But here’s the catch: if you don’t pay when asked, your shares can be forfeited. That’s not just theoretical — it happens. Usually, you’ll see Partly Paid Shares pop up in rights issues, follow-on offers, or when companies need staggered funding. The takeaway? You’re signing up for gradual payments, but also for a real commitment.
Buying partly paid shares usually happens during specific issues, such as rights offerings or follow-on public offers. You pay the initial application money and commit to future calls as scheduled by the company.
When it comes to selling, these shares often have separate trading symbols until they become fully paid. Liquidity may not always be high, but you can sell them on recognised stock exchanges.
Calculating the buy average for partly paid shares isn’t straightforward. You can’t just look at the application price. Instead, you need to add every payment — application, first call, second call — to calculate the total cost per share.
Say you subscribed to 100 shares, paying ₹30 upfront. Later, you paid ₹40, and then ₹30 again. Your outflow adds up to ₹100 per share. Divide the total spent by the number of shares, and you’ve got your buy average.
Don’t forget transaction charges or brokerage, if any. Keeping neat records of all payments helps not only when you sell but also at tax time — since capital gains depend on accurate cost reporting.
Additionally Read: Difference Between Stocks and Shares
You Can Invest with Lower Upfront Capital - Partly Paid Shares let you start small. Instead of coughing up the entire amount upfront, you commit less at the beginning. This helps if you want broader exposure without straining your cash position immediately.
You get a longer payment window - Calls are made in stages, giving you breathing room. That means you can arrange funds over time and still participate in significant equity issues — useful if liquidity is tight today but you expect inflows later.
You retain shareholder rights - Here’s something many people overlook: even as a partly paid shareholder, you often still receive dividends and voting rights. They’re linked to the proportion you’ve paid, but it still gives you a seat at the table.
You may benefit from appreciation - If the company does well before the final call is made, your partly paid shares could gain value in the market. That means you see upside potential even before fully paying off the instrument.
You’re bound to future payments - Once you subscribe, you’re legally tied to future calls. If you miss a payment, the company can penalise you or even forfeit your shares. Flexibility at the start becomes a rigid obligation later.
You may face liquidity issues - Unlike fully paid shares, partly paid ones aren’t always liquid. Trading volumes are often thin, so finding buyers may take time. If you plan to exit quickly, this can be frustrating.
You take on timing risk - Markets move unpredictably. If performance dips or sentiment changes before you finish paying installments, your partly paid shares may lose value while you’re still mid-commitment. That’s a risk unique to this structure.
You have tax complexities - Tracking capital gains on partly paid shares is trickier. Since payments are staggered, your cost base changes with every call. Filing taxes becomes more technical, requiring careful record-keeping of dates and amounts.
Factor | Partly Paid Shares | Fully Paid Shares |
Payment status | You pay in instalments | You pay full upfront |
Risk of forfeiture | Yes, if calls go unpaid | None |
Trading liquidity | Lower, limited demand | Higher, active demand |
Shareholder rights | Limited until fully paid | Full from allotment |
Tax and accounting | Complex, staggered | Straightforward |
So which works better? Honestly, it depends. If you’d rather stagger your outflows, partly paid shares make sense. If you prefer simplicity and immediate control, fully paid shares keep things cleaner.
Additional read: What Are Shares
Exploring equity through partly paid shares is like buying a house in instalments. You don’t commit the whole amount upfront, but you’re still on the hook for future payments. That balance of flexibility and obligation makes them interesting.
They suit investors who want phased entry but can honour calls without stress. Liquidity, tax tracking, and forfeiture risk are the trade-offs. Ultimately, knowing what are partly paid shares — how they work, where they fit, and the risks involved — helps you align them with your broader portfolio strategy.
Share this article: 
When a company issues partly-paid shares, they send a “call notice” asking shareholders to pay the next instalment. All holders of those shares must pay the same amount per share by the date specified.
If a shareholder does not pay the call amount by the due date, the company may forfeit the partly paid shares after giving due notice. Once forfeited, the shareholder loses rights over those shares and generally does not receive a refund of the amount already paid.
Disclaimer :
The information on this website is provided on "AS IS" basis. Bajaj Broking (BFSL) does not warrant the accuracy of the information given herein, either expressly or impliedly, for any particular purpose and expressly disclaims any warranties of merchantability or suitability for any particular purpose. While BFSL strives to ensure accuracy, it does not guarantee the completeness, reliability, or timeliness of the information. Users are advised to independently verify details and stay updated with any changes.
The information provided on this website is for general informational purposes only and is subject to change without prior notice. BFSL shall not be responsible for any consequences arising from reliance on the information provided herein and shall not be held responsible for all or any actions that may subsequently result in any loss, damage and or liability. Interest rates, fees, and charges etc., are revised from time to time, for the latest details please refer to our Pricing page.
Neither the information, nor any opinion contained in this website constitutes a solicitation or offer by BFSL or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service.
BFSL is acting as distributor for non-broking products/ services such as IPO, Mutual Fund, Insurance, PMS, and NPS. These are not Exchange Traded Products. For more details on risk factors, terms and conditions please read the sales brochure carefully before investing.
Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
For more disclaimer, check here : https://www.bajajbroking.in/disclaimer
Level up your stock market experience: Download the Bajaj Broking App for effortless investing and trading
Enjoy low brokerage on delivery trades
|
Open Your Free Demat Account
Enjoy low brokerage on delivery trades
|
