What are partly paid shares?

Partly paid shares are shares that are issued and sold to investors at a partial payment, with the remainder of the payment due at a later date. These shares are often used by companies as a means of raising capital, allowing investors to participate in the company's growth without requiring a large upfront investment.

How does it works?

1. Investors can purchase partly paid shares at a lower price than fully paid shares, because they're not paying the full amount upfront.
2. The rest of the money is paid in instalments over a period of time.
3. Partly paid shares are often used to raise capital for companies that are expanding or restructuring.

For Ex.: Partly paid shares are like a down payment on a house - you buy them with the promise to pay the rest later.

Let's say a company needs to raise Rs.100 million to fund a new project, but it doesn't want to issue all of the shares at once. Instead, it decides to issue partly paid shares at Rs.10 per share, with the remaining Rs.5 per share due in one year. Investors can buy 10 shares for Rs.100, but they'll only own a partial stake in the company until they pay the remaining Rs.50 to fully own the shares.