A business example
A founder owns all 1,000 existing ordinary shares. An investor receives 250 new shares with the same assumed economic rights.
Before issue
The founder holds 1,000 of 1,000 shares: 100%.
After issue
There are 1,250 shares in total.
New percentage
1,000 ÷ 1,250 = 80% for the founder; the investor holds 20%.
What this shows
The founder still owns 1,000 shares. The percentage fell because the denominator increased, not because 250 founder shares were sold.
What it is often confused with
A lower percentage does not alone show a lower rupee value; pricing and rights also matter.
What to look at in your business
Compare the capital table before and after the proposed transaction.
Context and further reading
This entry explains the business term. The related guide below provides the next layer of context; any applicable legal test depends on the transaction and relevant period.
Kosha.Services · Updated 2 October 2026