Equity
The residual ownership interest in a company: what would remain for its owners once every liability had been settled.
Formula
Equity = Total Assets - Total Liabilities
Unit
₹ crore
In depth
Equity is used in two different senses that beginners routinely blur. On a balance sheet it is an accounting figure — assets minus liabilities, also called book value or shareholders' funds. In market conversation 'equity' means the asset class of shares themselves, as opposed to debt. The two numbers can differ enormously: a company with ₹450 crore of book equity may have a market capitalisation of ₹9,000 crore or ₹90 crore, because the market is pricing future profits while the balance sheet is recording past ones.
Worked example
A company reports total assets of ₹1,200 crore and total liabilities of ₹750 crore. Equity = 1,200 - 750 = ₹450 crore. With 30 crore shares outstanding, book value per share = 450 / 30 = ₹15. That ₹15 is an accounting figure, not a target price.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Equity” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.