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CAPITAL MARKETCAPITAL MARKET
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CAPITAL MARKET
ORGANISED UNORGANISED
SECURITIES
STOCK MARKET
LOANS FROM
BANKS & OTHERINSTITUTES
CORPORATE
SECURITIESGOVERNMENT
SECURITIES
PRIMARY
MARKETSECONDARY
MARKET
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Unorganized Capital MarketUnorganized Capital Market
Completely insulated from any control of the RBICompletely insulated from any control of the RBI
and not subjected to any statutory reserve.and not subjected to any statutory reserve.
Such as chit funds - conducted between friends orSuch as chit funds - conducted between friends orrelatives.relatives.
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Organized Capital MarketOrganized Capital Market
Includes institutions operating onIncludes institutions operating ongiven guidelines of RBI and othergiven guidelines of RBI and other
statutory bodies like SEBI.statutory bodies like SEBI.
Two types:Two types:-Stock market-Stock market
-loans from banks and non-banks.-loans from banks and non-banks.
For example:For example:Mutual Funds (Long term)Mutual Funds (Long term)
-ICICI Bank-ICICI Bank
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Organized Capital MarketOrganized Capital Market
- Loans- Loans
Main source of financing for the firms that doMain source of financing for the firms that do
not issue security.not issue security.
Cheapest form of finance.Cheapest form of finance.
Sources Banks( and other institutes andSources Banks( and other institutes andlenders.lenders.
Types Secured And UnsecuredTypes Secured And Unsecured (Credit Card(Credit Card
&Personal loan)&Personal loan) 66By: Rajat JhinganBy: Rajat Jhingan
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Organized Capital MarketOrganized Capital Market
Stock MarketStock Market
Place where shares are purchased and sold.Place where shares are purchased and sold.
Size $51 trillionSize $51 trillion
Deals in long term securities (funds) fromDeals in long term securities (funds) fromboth private and government.both private and government.
Includes corporate securities andIncludes corporate securities and
government securities.government securities.
Example- Bombay Stock ExchangeExample- Bombay Stock Exchange
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Stock MarketStock Market
- Government securities- Government securities
Instruments used for raising long termInstruments used for raising long term
capital from the public.capital from the public.
No risk involved in normal circumstances.No risk involved in normal circumstances.
Example - Government bonds.Example - Government bonds.
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Stock MarketStock Market
-Corporate Securities-Corporate Securities
Instruments used for raising long termInstruments used for raising long term
corporate capital from the public.corporate capital from the public.
Examples-issues of shares, debentures.Examples-issues of shares, debentures.
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Corporate SecuritiesCorporate Securities
-Primary Market-Primary Market
Part of corporate securities.Part of corporate securities.
Also called as New Issues Market.Also called as New Issues Market.
Deals in issuing of new securities in the formDeals in issuing of new securities in the form
of public issues, rights issues or privateof public issues, rights issues or private
placements to raise the capital of corporateplacements to raise the capital of corporate
enterprise.enterprise.
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Corporate SecuritiesCorporate Securities
-Secondary Market-Secondary Market
Provides a market place for purchase and sale ofProvides a market place for purchase and sale of
old securities.old securities.
Provides liquidity to old stock for firm andProvides liquidity to old stock for firm and
investors.investors.
Example-Stock exchanges.Example-Stock exchanges.
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Types of Secondary MarketTypes of Secondary Market
Organized security exchanges-Organized security exchanges-
Tangible entities.Tangible entities. Physically occupy space (such as a building or partPhysically occupy space (such as a building or part
of a building).of a building). Financial instruments are traded on theirFinancial instruments are traded on their
premises.premises.
over the counter markets-over the counter markets-
Informal market where negotiated deals takeInformal market where negotiated deals takeplace.place.
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DIFFERENCE BETWEEN PRIMARY &DIFFERENCE BETWEEN PRIMARY &
SECONDARY MARKETSECONDARY MARKET
In the primary market,In the primary market,
securities are offeredsecurities are offered
to public forto public for
subscription for thesubscription for thepurpose of raisingpurpose of raising
capital or fund.capital or fund.
For exampleFor example
-Reliance Power-Reliance Power
Secondary market isSecondary market isan equity tradingan equity tradingavenue in whichavenue in whichalready existing/pre-already existing/pre-issued securities areissued securities aretraded amongsttraded amongstinvestors.investors.
For exampleFor example-Reliance Petroleum-Reliance Petroleum
-DLF-DLF
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Stock ExchangeStock Exchange
Centres for trading of securitiesCentres for trading of securities
Total 24 stock exchanges in India-Total 24 stock exchanges in India-
22 are regional stock exchanges22 are regional stock exchanges
2 are primary stock exchanges2 are primary stock exchanges
-National Stock Exchange-National Stock Exchange
-Bombay Stock Exchange-Bombay Stock Exchange
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National Stock ExchangeNational Stock Exchange
Set up in June 1994.Set up in June 1994.
Provides fully automated screen-basedProvides fully automated screen-based
trading system across the country.trading system across the country.
Has S&P NSE 50 Index( Nifty).Has S&P NSE 50 Index( Nifty).
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Bombay Stock ExchangeBombay Stock Exchange
Established in1987.Established in1987.
BSE Index- BSE Sensex comprising of 30BSE Index- BSE Sensex comprising of 30stocks.stocks.
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Facts about Indian capital MarketFacts about Indian capital Market
Indias capital market includes primary,Indias capital market includes primary,
secondary, Over the counter market.secondary, Over the counter market.
Securities Board of Exchange(SEBI)-Securities Board of Exchange(SEBI)-
Central regulatory authority andCentral regulatory authority and
regulates capital markets in India.regulates capital markets in India.
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THANK YOUTHANK YOU
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