Primary Market and Secondary Market

Definition: The primary market is also known as the new issues market, where companies and institutions raise funds from the public by issuing new securities such as shares, debentures, and bonds.
Types of Issuers: There are two major types of issuers of securities:
- Corporate Entities: Companies that issue equity instruments (shares) and debt instruments (bonds, debentures, etc.).
- Government: Central and state governments that issue debt securities (dated securities and treasury bills).
Types of Issues: The types of issues made in the primary market include:
- Public Issue: Securities are issued to the general public, and anyone can subscribe to them.
  - Initial Public Offer (IPO): The first public offer of shares made by a company, which can be a fresh issue of shares or an offer for sale.
  - Follow-on Public Offer (FPO): A fresh issue of securities made by a company that has already done an IPO in the past.
- Preferential Issue: Securities are issued to an identified set of investors, such as promoters, strategic investors, or employees.
- Rights Issue: Existing shareholders are given the right to subscribe to newly issued shares in proportion to their existing shareholding.
- Bonus Issue: Existing shareholders are issued additional shares in proportion to their existing shareholding without any additional cost.

Definition: The secondary market is where investors can buy or sell listed securities through stock exchanges.
Segments: Stock exchanges have two main segments:
- Cash Market Segment
- Derivatives Market Segment
Listing and Trading: Securities issued in the primary market are listed on a recognized stock exchange within six working days from the date of the closure of the issue. The shares are then traded on the stock exchanges, and investors can buy or sell them through SEBI-registered stock brokers.