You are here: Home » Markets » News
Business Standard

Decoded: Primary and secondary markets in a nutshell

The listing of Paytm and Nykaa in the primary market made a lot of news recently due to Paytm's poor showing and Nykaa's success. Let's find out what are primary and secondary markets.

Topics
Markets | IPO

Rex Cano  |  Mumbai 

The primary market provides companies a platform to float their Initial Public Offerings or IPOs and raise capital. The involvement of companies ends with the primary market. And in the secondary market, the shares allotted in the primary market are traded. Just think of a situation where there was no secondary market and people had to track down the shareholders to buy or sell a stock. So, the secondary market works as platform which brings together all the sellers and buyers of stocks. What is a primary market? Primary market refers to a market place where shares or securities are first offered by the issuer or company to the general public. It is also known as the market. Companies tap the primary market to list at the bourses and raise funds. This fund can be used to pay the company’s debt obligation, expand capacity, or provide an exit to some of the existing stakeholders.

A company has to meet a set of financial and regulatory criteria before making a debut in the primary market. What is a secondary market? Secondary market refers to the open stock market, a place where investors can buy and sell shares at prevailing prices. Also, shares of companies that are issued through the primary market are then available for buying and selling in the secondary market, once the listing process is completed. For example, a company, let us call it ABC, wants their shares to be listed on the stock exchanges. So it will float an in the Primary market. Over there, after the is closed, shares will be allotted to successful bidders. And after the share allotment, these stocks will be listed and available for trading in the secondary market. So investors can now buy and sell shares anytime during market hours. Well, the fact is, both these are not comparable as they play a diverse role. Primary market is the gateway for companies desirous to list their shares in the secondary market. And in the secondary markets, like Bombay Stock Exchange (BSE) or New York Stock Exchange (NYSE), investors trade in previously issued securities.

Watch Video

MONTHLY STAR

Business Standard Digital

Business Standard Digital Monthly Subscription
199.00  
subscribe
Complete access to the premium product
Convenient - Pay as you go
Pay using Amex/Master/VISA Credit Cards and VISA Debit Cards Only
Auto renewed (subject to your card issuer's permission)
Cancel any time in the future
Requires personal information

What you get?

ON BUSINESS STANDARD DIGITAL

  • Unlimited access to all the content on any device through browser or app.
  • Exclusive content, features, opinions and comment – hand-picked by our editors, just for you.
  • Pick 5 of your favourite companies. Get a daily email with all the news updates on them.
  • Track the industry of your choice with a daily newsletter specific to that industry.
  • Stay on top of your investments. Track stock prices in your portfolio.
  • 18 years of archival data.

NOTE :

  • The product is a monthly auto renewal product.
  • Cancellation Policy: You can cancel any time in the future without assigning any reasons, but 48 hours prior to your card being charged for renewal. We do not offer any refunds.
  • To cancel, communicate from your registered email id and send the email with the cancellation request to assist@bsmail.in. Include your contact number for speedy action. Requests mailed to any other ID will not be acknowledged or actioned upon.

SMART ANNUAL

Business Standard Digital
Subscribe Now and get 12 months Free

Business Standard Premium Digital - 12 Months + 12 Months Free
1799.00
subscribe
Subscribe for 12 months and get 12 months free.
Single Seamless Sign-up to Business Standard Digital
Convenient - Once a year payment
Pay using an instrument of your choice -all Credit and Debit Cards, Net Banking, Payment Wallets, and UPI
Exclusive Invite to select Business Standard events

What you get

ON BUSINESS STANDARD DIGITAL

  • Unlimited access to all content on any device through browser or app.
  • Exclusive content, features, opinions and comment - hand-picked by our editors, just for you.
  • Pick 5 of your favourite companies. Get a daily email with all the news updates on them.
  • Track the industry of your choice with a daily newsletter specific to that industry.
  • Stay on top of your investments. Track stock prices in your portfolio.

NOTE :

  • The monthly duration product is an auto renewal based product. Once subscribed, subject to your card issuer's permission we will charge your card/ payment instrument each month automatically and renew your subscription.
  • In the Annual duration product we offer both an auto renewal based product and a non auto renewal based product.
  • We do not Refund.
  • No Questions asked Cancellation Policy.
  • You can cancel future renewals anytime including immediately upon subscribing but 48 hours before your next renewal date.
  • Subject to the above, self cancel by visiting the "Manage My Account“ section after signing in OR Send an email request to assist@bsmail.in from your registered email address and by quoting your mobile number.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, December 01 2021. 08:45 IST
RECOMMENDED FOR YOU
.