- Primary Market:
- Where securities are created and sold for the first time.
- Transaction is between the issuer (company) and the investor.
- Example: A company selling new shares in an Initial Public Offering (IPO).
- Secondary Market:
- Where previously issued securities are traded among investors.
- The issuer (company) is not directly involved in these trades.
- Example: Bombay Stock Exchange (BSE).
| Feature | Primary Market | Secondary Market |
|---|---|---|
| Nature | Creation and first sale of securities | Trading of previously issued securities |
| Involvement | Issuer (company) and investor | Investors among themselves |
| Purpose | Raise new capital for the issuer | Provide liquidity to investors |
| Example | Initial Public Offering (IPO) | Stock exchanges (BSE, NSE) |