What is Primary Market?
5paisa Research Team
Last Updated: 06 Sep, 2024 11:42 AM IST

Content
- Understanding Primary Market
- Functions of Primary Market
- Types of Primary Market Issuances
- Examples of Primary Stock Market Selling
- Advantages of Primary Market
- Private Placement and Primary Market
- Conclusion
Understanding Primary Market
The primary market refers to a portion of the capital market wherein companies, institutions, governments, and other entities attain funds through selling debt and equity-based securities. When a corporation chooses to go public by raising an IPO (initial public offering) for the very first time, it is done in the primary market. The securities are primarily sold for the very first time due to which, a primary market is also referred to as the NIM (New issue market).
During this IPO, the corporation focuses on selling its shares to the investors directly in the primary market. This process of boosting the investment capital through selling new stock to traders through Initial Public Offering is called underwriting.
On selling these shares, the sales are further purchased and sold by investors in the secondary market.
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