TYPES OF CAPITAL MARKETS | பங்குச் சந்தைகளின் வகைகள்

 

TYPES OF CAPITAL MARKET

Capital Markets are nothing but share markets since it improves a country's economy and capitalization.

Basically, there are two types of Capital markets,

1. Primary Market
2. Secondary Market

These are the ways in which a company raises its capital or its wealth by offering its assets or shares to the public and others.

PRIMARY MARKET:

Basically, the underlying market is where a company raises capital directly from individuals and institutions in exchange for the company's securities or shares.

In the Primary Market, a company can raise its capital by issuing its shares to the public in two ways 

1. IPO [ Initial Public Offering ]
2. FPO [ Follow On Public Offer ]

Initial Public Offering [IPO]:

IPO is a strategy of acquiring or creating wealth for the company by making the company go public. It means that when a company makes its shares available on the market, it transitions from private to public.  IPO is applied by Unlisted Companies (i.e. companies which are new to the share market)

So the assets or shares (i.e. new shares) of the company are available in the market for the public for the First time. Hence it has coined the name Initial Public Offering.

We will see about IPO in detail in a separate post.

Follow on Public Offer [FPO]:

FPO is raised by an existing company in the stock market. The main objective of FPO is to raise additional capital for the company. This capital may be needed for several purposes, such as working capital needs, expanding the company, repaying debt, or starting a new project.

SECONDARY MARKET:

In the Previous case, the company's shares are initially offered to the company for wealth creation.

Now, let us consider a scenario, A company named "XYZ Ltd"  issues IPO for 10,000 shares, and after the IPO is filed all the shares are subscribed and there is no other share is left to buy. 

Now, can't we be able to buy that company's share again?

The Answer is that you can buy or sell the shares by trading the XYZ Ltd company's shares in the Secondary market. 

Secondary Market is nothing but the various stock exchanges (i.e. National Stock Exchange (NSE), Bombay Stock Exchange (BSE), etc. ) 

Therefore, this market where stocks are bought and sold via electronic media is a secondary market.

DISCLAIMER:-

The content of this site is only for educational purpose. I am not SEBI Registered. The motive of this site is to share my knowledge on share market to new budding investors and others who are learning about stock market

My Kind request to my site viewers, Before taking any decision please do self analysis, consult or discuss with Your financial Advisor .

மறுப்பு:-

இந்த தளத்தின் உள்ளடக்கம் கல்வி நோக்கத்திற்காக மட்டுமே. நான் செபியில் பதிவு செய்யப்படவில்லை. இந்த தளத்தின் நோக்கம், பங்குச் சந்தையைப் பற்றிய எனது அறிவை புதிய வளரும் முதலீட்டாளர்கள் மற்றும் பங்குச் சந்தையைப் பற்றி அறிந்துகொள்ளும் மற்றவர்களுக்குப் பகிர்வதாகும்

எனது தள பார்வையாளர்களுக்கு எனது அன்பான வேண்டுகோள், எந்தவொரு முடிவையும் எடுப்பதற்கு முன், சுய பகுப்பாய்வு செய்யுங்கள், ஆலோசனை செய்யுங்கள் அல்லது உங்கள் நிதி ஆலோசகருடன் விவாதிக்கவும்.