Primary and Secondary Market

Basic level introduction to Primary and Secondary Market, what is a stock. What is IPO, FPO. How the stock market works.How the stock market works. How the stock market works.How the stock market works.

So what is a Stock ?
When a company need to raise a huge amount of Money they can introduce them self in the stock market and raise the required fund.

Who can Enter the Stock Market ?
It is not the case that any company can enter into stock market. There are terms and a regulatory body that keep track of the company to prevent fraud in future.

How it works ?
At the start the company has to begin with IPO.
IPO - stands for Initial Public Offering. When the company raises fresh capital from the public for the first time.
The IPO has a price band and a period till which a people can buy it from the primary market.

Once the IPO subscription date ends the stock of the Company gets listed into the Secondary Market.
In the secondary market anyone can buy, any quantity of the share of the given company.

What is FPO then ?
FPO - stands for Follow On Public Offer. When the company raises capital after an IPO has already been made and shares of company are held by public and are already listed on the stock exchange.


Author: Sagr25 Apr 2012 Member Level: Bronze   Points : 0


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