Page 78 - DCOM304_INDIAN_FINANCIAL_SYSTEM

Rupesh Roshan Singh, Lovely Professional University
Unit 5: Primary Market

Unit 5: Primary Market Notes

CONTENTS
Objectives
Introduction

5.1 Functions of Primary Market in India
5.2 Structure of Primary Market in India
5.3 Methods of Distribution of Securities

5.3.1 Public issue Through Prospectus
5.3.2 Offer for Sale
5.3.3 Private Placement
5.3.4 Rights Issue
5.3.5 Over-the-Counter placement

5.3.6 Initial Public Offer through Stock Exchange Online System (E-IPO)
5.3.7 Book-Building
5.3.8 Green Shoe Option

5.3.9 Share Auction For QIBs
5.4 Primary Market Intermediaries in India
5.5 Summary
5.6 Keywords
5.7 Review Questions

5.8 Further Readings

Objectives

After studying this unit, you should be able to:

 Learn the concept of primary market;
 Understand functions of primary market;
 Discuss the structure of primary market in India;
 Understand the method of distribution of securities;

 Understand Intermediaries in the primary market of India.

Introduction

The securities markets of our country, where securities of corporate enterprises are traded,
comprise two main markets, viz., primary market and secondary market. In the primary market,
new securities are floated and exchanged for cash, credit or other securities. New security issues
are floated both by the newly set up organizations and by the existing ventures. This market is
popularly designated as new issues market. Contrary to this, in the secondary market buying

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