Published by Gulshan Sachdev on 22/03/2019 at 7:01 PM

What is Stock Market? What is Primary & Secondary Market?

Share Market is a platform which facilitates exchange of ownership of a company through buying and selling of shares. Stock market is divided into 2 parts – Primary & Secondary Market

Primary Market: Companies require funds to grow. Instead of borrowing from banks the companies go public and raise funds by giving away part of their ownership in form of shares or stocks. Company offer shares for the first time through Initial Public Offering. Here money is received by the company in exchange of shares. This is known as Primary Market. Companies raise money in the primary market through securities such as shares, debentures and preference shares

Secondary Market:Once the shares are allocated through Initial Public Offering, the shares are then freely traded by the investors among themselves and not with the issuing organization. This market is termed as Secondary Market which we usually see on Television on day to day basis.