Types of Markets
The share market is mainly classified into Primary Market and Secondary Market. Both play an important role in helping companies raise funds and allowing investors to trade securities.
📌 1. Primary Market
Definition:
The primary market is where companies issue new shares to the public for the very first time, usually through an Initial Public Offering (IPO). Investors purchase these shares directly from the company, and the money raised is used for expansion, projects, or debt repayment.
Example:
When LIC launched its IPO in 2022, investors bought shares directly from the company before it got listed on NSE and BSE.
📌 2. Secondary Market
Definition:
The secondary market is where investors trade already issued shares with each other. The issuing company is not involved in these transactions, and the market value is decided by demand, supply, and company performance.
Example:
Buying or selling Reliance Industries shares on NSE or BSE is part of secondary market activity.
🔷 Other Market Segments
Equity Market – Trading of company shares.
Derivatives Market – Futures, options, and other contracts.
Commodity Market – Gold, silver, oil, and agricultural goods.
Currency Market (Forex) – Exchange of currencies like USD/INR.
Key Participants
Retail Investors – Individuals trading in shares.
Institutional Investors – Mutual funds, banks, insurance firms.
Traders & Market Makers – Provide liquidity in markets.
All trades are regulated by SEBI (Securities and Exchange Board of India), ensuring transparency and fair practices.
