CAPITAL MARKET - 15 Mints Seminar Notes

CAPITAL MARKET - 15 Mints Seminar Notes

• The term capital market refers to any part of financial system that raises capital from bonds, shares and other investments. The buying and selling is undertaken by participants such as individuals and institution.
  
• A capital market is a financial market in which long term debt or equity backed securities are bought and sold, in contrast to a money market where short term debt is bought and sold.
  

SECURITES  

Securities are investment that allow you to own things used to raise capital in public and private market, they are tradable asset Ex: stocks and bonds.

There are two types of capital market

1. Primary market
   
2. Secondary market
   

PRIMARY MARKET

    Where new securities are issued and sold when company publicly sells new stocks or bonds for the 1st time. It is known as New issue market/IPO (Initial Public Offering) 

SECONDARY MARKET

      It is a place where investors buy and sell securities they already own., the financial market in which previously issued financial instrument such as stock, bonds, options and futures are bought and sold

INITIAL PUBLIC OFFERING

• IPO refers to an offer of securities made to public for subscription by company for 1st time.
  
• These companies are not listed in NSE or BSE, so they are know an unlisted companies
  
• These are 1st raising funds for the companies
  
• Risk management is higher than FPO as they are raising for the 1st time and public wont be aware much about the company
  
• Profits are higher than FPO
  
• Here securities are sold only once as they are the 1st time trading for first time
  
• Place where securities are created
  

FOLLOW ON PUBLIC OFFERING

• Already companies which have listed and trading in NSE and BSE, they are raising funds through  again to expand their companies
  
• They have listed and trading in NSE and BSE
  
• Their risk is lower than IPO as already the company has raised once and 2nd time raising funds to expand
  
• Their profit is lower than IPO
  
• The place where securities are traded
  
• The prices fluctuate or vary depending on demand and supply
  
• The purchases is an ever going process
  

Presented By,

Nirupamma

Banking Student 

Magme School Of Banking