Equity share capital is the portion of a companys capital that is raised by issuing shares to shareholders in exchange for ownership of the company. It is a type of financial instrument that allows companies to raise funds from the public and is an important part of equity capital markets, which companies use to raise money for operations and expansion. Equity share capital is reported by a company on its balance sheet in the shareholders equity section, and it may be listed in separate line items depending on the source of the funds.

Some key features of equity share capital include:

• Ownership Rights: Equity shareholders have the right to participate in the company’s management by electing directors and voting on important decisions.

• Dividends: Equity shareholders may receive dividends, which are a portion of the companys profits paid out to shareholders.

• Appreciation in Value: Equity shareholders may benefit from potential appreciation in the value of their shares as the company grows over time.

Companies can issue equity shares through initial public offerings (IPOs) or secondary offerings such as rights issues or private placements. Investors who hold equity shares are said to hold fractional ownership of a company, and the equity share capital raised through equity shares issued is used for developing the business venture of the company.