What is Primary and Secondary Market?

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 1. Primary Market


Definition: The primary market is where new securities are issued for the first time. Companies raise capital by issuing shares or bonds to the public.


Key Features:


Initial Public Offerings (IPOs) are conducted in the primary market.


Investors can buy shares directly from the issuing company.


Funds raised are used for business expansion and other corporate purposes.




2. Secondary Market


Definition: The secondary market is where previously issued securities are traded among investors. This is where most trading occurs after the initial sale of shares.


Key Features:


Investors buy and sell shares through stock exchanges like the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).


The price of securities is determined by supply and demand.


No capital is raised by the company in the secondary market.


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