ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The primary market is where companies issue a new security, not previously traded on any exchange. A company offers securities to the general public to raise funds to finance its long-term goals. The primary market may also be called the New Issue Market (NIM).

Detailed explanation-2: -The types of primary market issues include initial public offerings (IPOs), Follow-on Public Offerings (FPOs), Rights issues, Bonus issues, Private placements, Preferential allotments, and Qualified Institutional Placements.

Detailed explanation-3: -Primary market is also known as New Issue Market as in this market only new companies can issue their securities and buyers have only buying option.

Detailed explanation-4: -Primary markets create long-term instruments through which corporate entities raise funds from the capital market. It is also known as the New Issue Market (NIM).

Detailed explanation-5: -A company issues security in a primary market as an initial public offering (IPO), and the sale price of such new issue is determined by a concerned underwriter, which may or may not be a financial institution. An underwriter also facilitates and monitors the new issue offering.