CAPITAL MARKET IN INDIA

What is Capital Market ?
capital market involves lending and borrowing funds for medium term to long term periods. its usually more than one year.

the participants of capital market includes commercial banks. government , mutual fund, corporate and financial institution.

in India capital market is classify in to 2 parts:

1. primary capital market
2. secondary capital market


1.primary capital market : primary capital market is also called new issuer market.
whenever companies need fund it issue IPO - initial public offer to public for raising funds. across the country people subscribe the share and its regulated by security exchange board of India.
the main distinction of primary market is that whenever companies issued the funds its totally fresh issue.

2.secondary market: in the secondary market securities are resale between investor in order to make profit. in short in organized stock exchange the investor traded their security or share.
so BSE and NSE are come under secondary market.

the instrument used in capital market are as follows:

1. equity share capital: its security or share subscribed by the public. whenever company issue the ipo its mean dilution of control , bcoz share holder get voting right. the other right are - claim on residual income, right issue, bonus issue etc.

2. preference share capital: its fund raised by company from public for definite period.investorr get dividend at fixed interest rate. preference shareholder claim the dividend before equity share holder.

3.debentures: its debt issued by company to public.
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4. public deposit

5.global depository receipt and American depository receipt.

6. foreign currency convertible bond

7. euro loan etc.

8. euro bond

9.qualified institutional placement etc.
this are the instrument company used to raise the fund from capital market.
if any body confused regarding any instrument plz ask without any hesitate.


Brijesh Mishra
brijeshmishra49@gmail.com