Primary & Secondary Markets

Financial Management
Prof. Deepa Iyer

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 Primary & Secondary Markets
• An initial public offer popularly called IPO is an
excellent way of making money in the primary
market.
• In the primary market, investors buy shares
directly from Companies issuing them. In the
secondary market, investors trade shares already
issued by Companies over stock exchanges
like National Stock Exchange(NSE) and Bombay
Stock Exchange (BSE).

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 Primary & Secondary Markets
• Secondary markets are defined as the markets where
the securities ,both equity and debt, which are initially
issued by the companies are traded. The trading
involves buying and selling of the securities.
• Secondary markets help trade safely in shares as they
are regulated by the capital marketsregulator, SEBI.
• Secondary market is the market for outstanding
securities and enables price discovery. The market
value of shares gives value to the Company.

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 Primary & Secondary Markets
• The securities or the financial instruments are
issued in the primary market and the investors
purchase these instruments directly from the
IPO or through the Private Placement and sell
these to other investors in the secondary
market.

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 Primary & Secondary Markets
• Various securities & financial instruments that are
traded in the stock market are;
• Equity Shares
• Preference Shares
• Bonus Shares
• Bonds
• Debentures
• Commercial Papers
• Treasury Bills
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