Primary Market, also called the New Issue Market, is the market for issuing new securities. The main players of these markets are the private and public companies that offer equity or debt based securities such as stocks and bonds in order to raise money for their operations such as business expansion, modernization and so on.
They sell their securities to the public through an Initial Public Offering (IPO). The securities can be directly bought from the shareholders, which is not the case for the secondary market. The primary market is a market for new capital that will be traded over a longer period. Here the securities are issued on an exchange basis.
A Primary Market is not inclusive of sources, from where companies can generate external finance over a long term, such as loans provided by financial organizations. Through these markets, companies can also go public, which means changing private capital to public capital.
Many companies have entered the primary market to earn profit by converting their capital, which is basically a private capital, into a public one, releasing securities to the public.
Our Investment Banking Professionals are underwriters in the primary markets and thus are major facilitators in the primary market.