A partly paid share is a share in a company, which has only partially been paid compared to the full issue price. This means that investors like you and I can buy these shares by not paying the full issue price. The balance amount for partly paid shares can be made in instalments when calls are made by the company.

For example: Suppose the actual stock price of a company is Rs 100. An investor purchased it for Rs 75 per share. At a future date, the company that issued the share can call the shareholder to pay up the balance amount of Rs 25 (or make an instalment). When you buy partly paid shares you buy them with the understanding that as and when the company requires more funds, calls will be made from time to time until the shares are fully paid.

Few questions that you might have concerning partly paid shares are addressed below

Can you sell these partly paid shares before the call date?

Yes, you can sell partly paid shares before the call date.

Are partly paid shares tradable in the market?

Yes, partly paid shares can be traded in the markets until they are suspended two days before the record date. To know about the record date, click here.

How and when do you make call payment for partly paid shares?

The Registrar & Transfer Agent (RTA) of the company of which you hold partly paid shares will send you a website link for making payment of the call money. You will receive all communication from the RTA on the email ID mapped to your Zerodha account. The payment is to be made from the shareholders’ bank account. Payments from third party accounts cannot be made.

What will happen if you don’t make the call payment?

Suppose you fail to pay the call money. In that case, the partly paid shares may be forfeited, i.e. the current partly paid shares you hold will be worthless and will not trade on exchanges as the company will allot new partly-paid shares under different ISIN.

International Security Identification Number(ISIN) is a unique code generated for a scrip.

The company may also levy interest on the amount you owe. This amount depends on the number of partly paid shares you hold.

What happens after paying the first call to the company?

The company will allot you new partly-paid shares under the new ISIN, which will be paid up to the amount you have paid(initial application money + first call money). The partly-paid shares will be listed again after collecting the first call payment, and you will be able to trade them. These new partly-paid shares will be shown in your Zerodha Kite holding under a new ISIN.

To know why sometimes partly paid shares don’t show up in your holdings, click here.