INTRODUCTION ON CAPITAL & DEBT MARKET

By: Kritika Narang SRS2011PGDM19F029

Capital Market
A market for securities where business

enterprises and governments can raise longterm funds. It is defined as a market in which money is provided for periods longer than a year. It forms an important core of a countrys financial systems.

 It is composed of those who demand funds

(borrowers) and those who supply funds (lenders).

It is the market for financial assets that have

long or infinite maturity.

Types of Financial Instruments

equity instruments credit market instruments, insurance instruments, foreign exchange instruments, hybrid instruments and derivative instruments.

Primary Market

Secondary Market

Capital Market

Primary Market
In this market, new stock or bond issues are

sold to investors via a mechanism known as underwriting. It is a market for raising fresh capital in the form of shares or debentures. It allows for the formation of capital in the country & the accelerated industrial & economic development.

 Modes of raising Capital

Public Issue

Rights Issue

Private Placement

Secondary Market
The existing securities are sold and bought

among investors or traders, usually on a securities exchange, over-the-counter, etc. It is also known as stock exchange. There are at present 24 stock exchanges in India.

Debt Market
It refers to the financial market where investors buy and sell securities, mostly in the form of bonds.

The returns are riskfree.

Returns are also

termed as coupon rate.

Government Securities Market

Classification of Debt Market

Bond Market

Advantages & Disadvantages

Advantages:
Assured returns High liquidity

Disadvantages:
Not high returns

Thank You