Capital Market

What is capital market ?

The capital market is a financial market in which long-term debt or equity-backed securities are bought and sold. It is a market for securities that represent long-term investments, as opposed to the short-term investments traded in the money market.

The capital market can be divided into two main segments: the primary market and the secondary market.

The primary market is where new securities are issued and sold to investors, either through an initial public offering (IPO) or private placement. In the primary market, companies and governments raise capital by selling securities to the public for the first time.

The secondary market is where securities that have already been issued are bought and sold among investors. This includes stock exchanges, such as the BSE, NSE, New York Stock Exchange and the NASDAQ, where publicly traded securities are bought and sold, as well as over-the-counter (OTC) markets, where securities are traded directly between buyers and sellers.

The capital market plays a crucial role in the economy, as it provides companies with a way to raise the capital they need to fund operations and expansion, and it gives investors the opportunity to buy and sell securities that represent ownership in those companies.