At first glance, it may seem true that only shareholders (buyers/sellers in the stock market) suffer when a company’s share price falls, because the company already raised its money during the Initial Public Offering (IPO) or follow-on issue. However, the fall in share price also indirectly affects the company in many important ways:
1. Market Reputation and Brand Image

• A declining share price signals lack of investor confidence.
• It can damage the company’s reputation in the market and among stakeholders.

2. Future Fundraising Becomes Difficult

• If the company wants to raise more capital through new share issues, rights issues, or convertible instruments, a low market price reduces the amount it can raise.
• Investors may also hesitate to subscribe if they see shares falling.

3. Takeover Risk

• A low share price makes the company more vulnerable to hostile takeovers, as acquiring a controlling stake becomes cheaper for competitors.

4. Employee Morale and ESOPs

• Many companies give employees ESOPs (Employee Stock Options).
• If share prices fall, employees lose motivation, which can hurt productivity and retention.

5. Creditworthiness and Loans

• Lenders and banks look at the company’s market capitalization as a sign of financial strength.
• A falling share price may hurt its ability to negotiate loans or credit lines.

6. Promoter Wealth and Control

• Promoters hold a significant portion of shares.
• A drop in share price reduces their personal net worth and may weaken their control over the company.

Hence-
Even though the immediate monetary loss of a falling share price is borne by traders and investors, the company itself suffers indirect consequences: weaker reputation, difficulty raising funds, higher takeover risks, employee dissatisfaction, and reduced creditworthiness.
This is why companies take falling share prices seriously and often take steps (like buybacks, better disclosures, or improved dividend policies) to regain investor trust.