CAPITAL MARKET

Presented By:
Sourabh Dubey

CAPITAL MARKET
The market where investment instruments like
bonds, equities and Securities are traded is known
as the capital market.
The primary role of this market is to make
investment from investors who have surplus funds
to the ones who are running a deficit.
The capital market offers both long term and short
term.

Types of financial
Instruments

Equity instrument
Credit market instruments
Foreign exchange instruments
Derivative instruments.
Nature of Capital Market
It has two segments
It deals in long-term securities
It helps in capital formation
It helps in creating liquidity

Types of Capital Market
Primary
Market
Secondary
Market
Primary Market
The primary market is that part of the Capital Markets
that deals with the new securities.
It is that market in which Shares, Debentures and
other securities are sold for the first time for collecting
long-term capital.
This market is concerned with new issues. Therefore,
the primary market is also called New Issue Market.






Features of Primary Market
It is related with new issues
It has no particular place
In a primary issue, the securities are issued by the
company directly to investors.
Companies, governments or public sector institutions
can obtain funding through the sale of a new stock or
bond issue.


Methods of Issuing
Securities
Initial Public Offer
Offer For Sale
Private Placement
Right Issue
Book building
Secondary Market
The secondary market is that market in which the
buying and selling of the previously issued securities
is done.
The transactions of the secondary market are
generally done through the medium of stock
exchange.
The chief purpose of the secondary market is to
create liquidity in securities.
Features of Secondary
Market

Creates liquidity
Comes after primary market
Has a particular place
Encourage new investments

The Indian Capital Market is
one of the oldest capital markets
in Asia which evolved around 200
years ago


Chronology Of Indian Capital
Market

1994-Equity Trading commences on NSE

1995-All Trading goes Electronic

1996- Depository comes in to existence

1999- FIIs Participation- Globalization

2000- over 80% trades in Demat form
ROLE OF CAPITAL MARKET
IN INDIAS INDUSTRIAL
GROWTH
Promotion of industrial growth
Raising long-term capital.
Ready and continuous market
Proper channelization of funds
Provision of a variety of services

Broad Constituents in the
Indian Capital Markets

Fund Raisers
Public Company
Private Company
Fund
Providers
Domestic, Foreign Investors
Retail Investors
Intermediaries
Stock Brokers, Sub Brokers
Merchant Bankers, Underwriters

ORGANISATION
BSE, NSE
NSDL, CDSL

MARKET REGULATORS
SEBI, RBI
40%
15%
37%
9%
Sources of External Finance
Bank Loans Non Bank Loans Bonds Stock
S
W
I
F
T
Society
For
Worldwide
Interbank
Financial
Telecommunication


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