What is Primary Market?........................

What is primary Market?

A primary market issues new securities on an exchange for companies, governments and other groups to obtain financing through debt-based or equity-based securities.

When a company decides to go public for the first time by raising an Initial Public Offering (IPO), it is done in the primary market. Since the securities are sold for the first time here, a primary market is also known as the New Issue Market (NIM).

During an IPO, the company sells its shares directly to the investors in the primary market. The entire process of raising investment capital by selling new stock to investors through an IPO is known as underwriting.

Once the shares are sold, they are bought and sold by traders in the secondary market.

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