Question
Explain constituents of Capital Market.
(i) Gilt Edged Market:
It is also known as the government securities market, which is a market for government and semi-government securities.
Features of this market are:
(ii) Industrial Securities Market:
It is a market for industrial securities such as bonds, equities, etc. It comprises two segments.
Primary Market:
It is also known as New Issue Market. The market is utilized for raising fresh capital in the form of shares and debentures. It helps to accelerate economic and industrial development.
Modes of raising capital in the Primary Market:
(i) Public Issue/Prospectus:
Securities are issued to the general public. This is the most popular method of raising long-term funds. In this method, securities are offered to the public by issuing a prospectus.
(ii) Rights Issue:
The equity shares of a company are issued to the existing equity shareholders in the form of rights issues. In this issue, additional securities are offered to the existing shareholders.
(iii) Private Placement:
Under the private placement, the shares of a company are sold among the selected group of persons. There are three categories of participants in the primary market i.e. issuers of securities, investors, and intermediaries.
Secondary Market:
It is a market where existing securities are sold or traded. This market is also known as the stock market. The secondary market consists of recognized stock exchanges operating under rules, bye-laws, and regulations duly approved by the government.
Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.