NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Introduction to the Securities Market
Which of the following is classified as a primary market activity in the Indian securities market?
A company issuing fresh equity shares to the public through an IPO is a primary market activity, because the primary market deals with the first-time issue of securities by issuers to raise capital. Trading of already issued securities happens in the secondary market.
- AA retail investor buying shares of a listed company on the NSE cash segment
- BA company issuing fresh equity shares to the public through an IPOCorrect
- CAn FPI selling listed bonds to a mutual fund on the exchange
- DA trader squaring off an intraday position in futures
Explanation
The primary market is where securities are issued for the first time by the issuer to raise capital, such as an IPO. The other options involve trading of already issued securities, which takes place in the secondary market.
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