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NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to the Indian Capital Market

A company wants to raise money by issuing shares for the first time to the public through a fresh issue with an offer document. In the Indian capital market, this activity takes place in which segment?

The first-time issue of shares to the public through an offer document happens in the primary market. This is where issuers raise fresh capital directly from investors, whereas subsequent trading of those shares among investors takes place in the secondary market on stock exchanges.

  1. APrimary marketCorrect
  2. BSecondary market
  3. CMoney market
  4. DForeign exchange market

Explanation

The primary market is where securities are issued for the first time by issuers to investors, such as through an IPO. Trading of already issued securities among investors happens in the secondary market. The money market deals with short-term instruments, not equity IPOs.

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