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Market

Ravi kiran yadav (assistant auditor) (165 Points)

27 July 2016

pls any 1 tel about Primary market nd secondary market with example nd state some merits nd demerits of dat

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(Guest)

Dear Ravi,

Let's understand about Indian Financial Markets. Financial markets is divided into 3 parts-

Money Market- It is used for lending and borrowing of short term funds. E.g., Call market, Treasury bill market, commercial paper, certificate of deposits, repos market etc.
Foreign Exchange Market
Capital Market/ Securities Market - It deals with long term funds. It is divided into 2 parts- Primary Market and Secondary Market.

Let's Understand about Primary and Secondary Market

PRIMARY MARKET-

A primary market is that segment of capital market where mobilization of finance is made from Investors to corporate capital structures by issue of new securities in the form of IPO (Initial Public Offering) and FPO ( Follow- up Public Offerings) are sold by Issuer company to the Public in the market.

In Simple Words, We can Say that Primary market are those market where securities are listed for the first time.

For Example: IPO. FPO, Right Issue, Bonus Share and Private placement.

SECONDARY MARKET:

Secondary Market is also known as Stock market or after market where securities which have been issued before are traded.

In Simple Words, We can say that Secondary market are those market where existing shares are traded amongs the investors.

For Example: NSE, BSE,OTCEI,ISE, RSE .

I hope this will help you in order to understand Primary and Secondary market.

Thanks for Reading