Capital Markets Module

Securities market is an organized exchange plus over the counter markets in which securities are traded. Securities markets provide a channel for allocation of savings to those who have productive need for them. Securities market has two interdependent segments: 1) Primary market and 2) Secondary market.

The primary market plays an important role in the securities market by forming a link between the savings and investments. It is through this market that the borrower’s viz., the Government and the corporate issue securities in which the investors deploy their savings. The primary market comprises, the public issues and the private placement market. A public issue consists of a company entering the market to raise funds from all types of investors; its debut is known as the initial public offer (IPO). In case of private placement, there are only a few select subscribers to the issue. The securities can be issued at a face value, or at a discount/premium; they may take a variety of forms such as equity, debt or some hybrid instrument. Apart from raising funds in domestic markets, resources are mobilized in international markets through the issuance of American Depository Receipts (ADRs)/ Global Depository Receipts (GDRs) and External Commercial Borrowing (ECB) route

Module Name : Primary and Secondary Market

The secondary market is where investors buy and sell securities they already own. It is what most people typically think of as the "stock market" though stocks are also sold on the primary market when they are first issued. The national exchanges, such as National Stock Exchange (NSE) and Bombay Stock Exchange are secondary markets.

4 Lessons