Book Value Per Share (BVPS) is a per-share measure of a company's net asset value — calculated by dividing total shareholders' equity (total assets minus total liabilities) by the total number of outstanding equity shares. It represents the theoretical per-share value that equity shareholders would receive if the company were immediately liquidated at the balance sheet values of its assets and liabilities. BVPS is calculated as: BVPS = (Total Shareholders' Equity – Preference Share Capital) ÷ Total Equity Shares Outstanding. The Price-to-Book (P/B) ratio — the current market price divided by BVPS — is one of the most widely used valuation metrics in Indian equity markets, particularly for financial sector companies including banks, NBFCs, and insurance companies where the balance sheet quality and capital adequacy are central to valuation. A P/B ratio below 1.0 means the stock is trading below its accounting net asset value — potentially indicating undervaluation or asset quality concerns. A high P/B premium (above 3x to 5x) indicates the market is valuing significant intangible assets, brand value, franchise strength, or superior future earnings power beyond what the historical balance sheet reflects. BVPS growth over time — driven by retained earnings — is a measure of a company's ability to compound shareholders' capital.
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