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.
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.
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Partly paid shares are issued with only a portion of the price paid upfront, while fully paid shares are settled in full at purchase. You’re required to pay the remaining instalments in partly paid shares as per the company’s call schedule.
You invest with less upfront money and still participate in ownership. These shares can fit your budget while offering exposure to equity growth. They also allow you to plan for future payments without needing full capital at the start.
You must honour future payment calls or risk forfeiture. They also carry liquidity and timing risks if the market turns before final payment. Tracking and calculating capital gains may also be more complex than with fully paid shares.
Taxation depends on when you sell and how much you’ve paid. Your cost of acquisition includes all paid amounts. Capital gains are calculated on the full cost once shares are fully paid, and tax is levied as per holding period and income slab.
Each instalment paid must be recorded as part of the cost base. Maintaining detailed records of dates and amounts helps ensure accurate capital gain calculations during tax filing.
Yes, they can be transferred on stock exchanges, but liquidity is often lower compared to fully paid shares. The buyer also takes over the responsibility of paying future calls.
Yes, but only if you’re comfortable with staggered payments. Buying partial shares works for some investors, though it requires discipline to meet future obligations without fail.
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