Definition: 

Capital market is a market where buyers and sellers engage in trade of financial securities like bonds, stocks, etc. The buying/selling is undertaken by participants such as individuals and institutions

Capital market is regulated by- SEBI (Securities and Exchange Board of India)

Description:

Capital markets help channelise surplus funds from savers to institutions which then invest them into productive use. Generally, this market trades mostly in long-term securities.

Capital Market consists of two main blocks, they are-

·   Primary Market

·   Secondary Market

Primary Market (New Issue Market)

It is a market where new securities are issued & traded. Companies, governments and other groups obtain financing through debt or equity based securities.

Secondary Market

Secondary market is basically a reselling market , Here the stocks that are already sold in the primary market are resold mostly by the stockholders or companies to gain more returns.

Shares/Equities

Companies usually divide their capital into small parts of equal value. This smallest part is known as a share. Companies usually issue shares in the public to raise capital. People who buy or are allotted shares are called shareholders.

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