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Primary & Secondary Market

There are two types of market

Primary Market:
In the primary market securities are issued to the Public and the proceeds go to the issuing company. This is the first time the company may be selling It’s share, in an exercise known as an IPO-Initial Public Offering. Here you buy shares directly from the company

The issue of securities by companies can take place in following methods:

  • Initial public offer (IPO)
  • Further issue of capital
  • Right issue to the existing shareholder
  • Offer of securities under reservation/firm allotment basis
  • Bonus Issue

Secondary Market:
After the IPO, the company will be listed on a stock exchange like the NSE (National Stock Exchange)/ BSE (Bombay Stock Exchange).Now It’s share can be freely traded - bought and sold. This is not done via a direct transaction, but through Stock Brokers who act as facilitators between the companies and shareholders who want to sell and those wanting to buy at the stock exchanges.

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