The primary market is where companies issue new securities directly to investors, like IPOs, to raise capital for various purposes.
Primary Market
IPOs in the primary market,
like Paytm's in November 2022, offer shares to the public, raising capital for company growth.
Primary Market Example
Primary market:New securities issued to investors by companies.Secondary market: Trading of existing securities among investors.
Difference Between Primary and Secondary Markets
The primary market fosters capital growth, sets securities prices, ensures transaction security, fuels economic progress, and allows direct investment.
Primary Market Functions
The primary market offers benefits such as direct capital raising, transparency, fair pricing, fostering economic development, and accessibility for all investors.
Advantages of Primary Market
Disadvantages of the Primary Market
Primary market drawbacks include high issuance costs, time-consuming processes, under-subscription risks, and regulatory complexities.