The document discusses capital markets, defining it as a market for borrowing and lending long-term capital funds required by businesses. It notes capital markets offer an ideal source of external finance. The document outlines the characteristics of capital markets, including that they are securities markets with prices set by participants located in specific areas that trade financial assets. It also describes the primary and secondary markets, and lists some of the key functions and importance of capital markets like facilitating savings, capital formation, industrial growth, and providing liquidity. Finally, it lists some new financial institutions that have evolved in Indian capital markets like venture funds, mutual funds, and stock exchanges.