Q: Difference between the primary market and Secondary Market ?

Ans: The difference between the primary market and Secondary market is as follows: 

1. In Primary Market,  the transaction is between the company and investor. 

2. In Secondary Market, the transaction is between the two investors. 

3. In Primary market , the amount is directly transferred to company whereas in Secondary market, the money is transferred from one investor to another investor.  

4. In Primary market, the price is decided by the company whereas in Secondary market the price of company is decided by supply and demand. 

Methods of raising funds in Primary Market: 

1. Public issue: IPO(Initial Public Offering)

2. Private placement (Selected investors) like venture capital, banks, mutual fund.

3. Right issue : Existing shareholders.


Stock exchange is Secondary market.

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