CAPITAL MARKET

The capital market is designed to finance the long-term investments. The transactions taking place in this market will be for periods over a year.

Capital Markets contd.

Provided resources needed by medium and large scale industries.
Purpose for these resources
Expansion Capacity Expansion Investments Mergers and Acquisitions

Structure of Capital Markets

Primary Markets Secondary Markets

Primary Markets
When companies need financial resources for its expansion, they borrow money from investors through issue of securities.

Securities issued a)Preference Shares b)Equity Shares c)Debentures

Primary Markets contd.

People who apply for these securities are: a)High networth individual b)Retail investors c)Employees d)Financial Institutions e)Mutual Fund Houses f) Banks

Secondary Markets
The place where such securities are traded by these investors is known as the secondary market. Securities like Preference Shares and Debentures cannot be traded in the secondary market Securities that are traded are traded by the retail investors.