Wednesday, December 20, 2017

What Is Primary Market Definition And Meaning

Leave a Comment
What Is Primary Market Definition And Meaning

The primary market refers to the set up by which the industry raises funds by issuing different types of securities. These securities are issued directly to the investors, both individual and institutions. The primary market discharges the important function of transfer of savings, especially of the individual, Government and public sector undertakings.

finance
[Post Image Courtesy of StockImages at FreeDigitalPhotos.net]

In the primary market, the new issues of securities are presented in the form of Public issues, Right issues and Private Placements. Its efficient operation is made possible by the financial intermediaries and financial institutions, who arrange long-term financial transactions for the clients. Issues of the securities in the primary market may be made through any of the following medium:

(i) Prospectus

(ii) Offer for sale

(iii) Private placement

The securities offered to the public through prospectus are directly subscribed by the investor. The issuing companies widely publicise the offer through various media. The Securities Exchange Board of India (SEBI) has classified various issues in three groups i.e., New issues, Right issues and Preferential issues.

The SEBI has issued various guidelines regarding proper disclosure for investor’s protection. These guidelines are required to be duly observed by the companies making issue of capital. The guidelines issued by the SEBI broadly cover the requirements regarding issue of capital by the companies. The guidelines are applicable to all the companies after the repeal of Controller of Capital Issues (CCI ) Act 1947.

The boom in the primary capital market, that started in the mid-eighties and accelerated thereafter, started slowing down by 1995. There are several reasons for this slowing down of resource mobilization in the primary market. In particular, the low return on new issues, some resulting in stock market fiasco, seems to have shattered the confidence of the investors.

If You Enjoyed This, Take 5 Seconds To Share It

0 comments:

Post a Comment

Do you have any reasonable comments for this post ? Please feel free to drop them below using the comment box. We will moderate and publish them as soon as possible. Cheers !

Google+ Badge

Copyright (c) 2015-2017, The BusinessParrot. All Rights Reserved. Powered by Blogger.

Recent Comments

Recent Posts

Followers

Blog Archive

Follow by Email

[about]

[Latest News][6]

Affiliate Marketing Guides
Agriculture Business Ideas
Amazon Online Store Tips
Banking & Finance Tips
Blogging & Webmaster Guides
Bulk SMS Short Code Guides
Computer & IT Business Ideas
Education Business Ideas
Entrepreneurship Tips & Freebies
Facebook Autopilot & Tips
Fashion & Decoration Ideas
Financial Calculators
Fiverr Income Guides
Free SMS Text Messages
Google Adsense Tips
Health Business Opportunities
Inspirational Poems & Literature
Insurance & Risk Management
Job Search Tips
Mobile Phone Tips & Business
Motivational Quotes & Tips
Oil & Gas Business Ideas
Online Business Guides
Online Importation Business Guides
Small Scale Business Ideas
Social Media Income Guides
Start-Up Business Ideas
Transportation & Haulage Ideas
Web & Graphic Designing Ideas
Work-At-Home Business Ideas