The capital market connects the surplus units with the deficit units. It means that the funds are channelized from those who have excess capital to those who need it.

1. CAPITAL MARKET

2.  FINANCIAL SYSTEM
 FINANCIAL INSTITUTIONS
 FINANCIAL MARKET
 FINANCIAL INSTRUMENTS
 FINANCIAL SERVICES
 CAPITAL MARKET
 CHARACTERISTICS / FEATURES OF CAPITAL MARKET
 FUNCTIONS / SIGNIFICANCES OF CAPITAL MARKET
 CLASSIFICATION OF INDIAN CAPITAL MARKET
 PRIMARY MARKET
 SECONDARY MARKET
 INSTRUMENTS OF CAPITAL MARKET
 RECENT TRENDS OF INDIAN CAPITAL MARKET

3. FINANCIAL
SYSTEMS
FINANCIAL
INSTITUTIONS
FINANCIAL
MARKETS
FINANCIAL
INSTRUMENT
FINANCIAL
SERVICES

4.  A financial institution is an institution that provides
financial services.
 Financial services refer to the activity of mobilizing
the financial resources from the savers or investors
to the users or borrowers.
 Thus, essentially financial institutions are the
intermediaries between the savers and borrowers of
the money.

5.  Financial markets can be referred to as those
centres and arrangements which facilitate buying
and selling of financial securities at low transaction
costs and at prices that reflect supply and demand.
 Securities include stocks and bonds, and
commodities include precious metals or
agricultural goods.
 Capital Market
 Money Market
FINANCIAL
MARKET
MONEY MARKET
ORGANIZED
MARKET
RBI
COMMERCIAL &
COOPERATIVE
BANKS
UNORGANIZED
MARKET
MONEY
LENDERS
NBFI
CAPITAL MARKET
PRIMARY
MARKET SECONDARY
MARKEY

6. Financial Instruments refer to those
documents which represent financial
claims on assets. Financial assets refers to
a claim to the repayment of a certain sum
of money at the end of a specified period
together with interest or dividend. Ex. Bills
of exchange, promissory note, Treasury
Bill, Government bond, Deposit Receipt,
Share, Debentures etc.
A) Money Market Instruments
B) Capital Market Instruments

7.  Financial services are the economic services provided by
the finance industry, which encompasses a broad range of
businesses that manage money, including credit unions,
banks, credit-card companies, accountancy companies,
consumer- finance companies, stock
brokerages ,investment funds, individual managers, and
some government-sponsored enterprises.
 These sectors are comprised of different businesses that
provide goods and services to consumers. The companies
that are grouped together in a sector provide a similar
product or service. For instance, companies that offer
agricultural services make up the agricultural
sector. Corporations that provide mobile or cellular
telephone services are part of the telecommunications
sector. This article looks at the financial services sector,
one of the most important segments of the economy.

8.  Capital market is a market for long-term securities that includes both debt and
equity. Companies and governments can raise long term funds (more than a year)
through this market. The capital market connects the surplus units with the deficit
units. It means that the funds are channelized from those who have excess capital
to those who need it.
 Funds are raised by issuing capital market instruments like stocks and bonds. These
instruments have a higher risk than money market instruments. However, at the
same time, these instruments generate higher returns. These markets are strictly
regulated in order to avoid any fraudulent practices. The Securities and Exchange
Commission (SEC) regulates the capital or securities market in the USA.

9.  LONG TERM INVESTRUMENTS
 LINK BETWEEN BORROWERS AND LENDER
 CAPITAL FORMATION
 ACCURATE TIMELY INFORMATION
 INCLUDES PRIMARY AND SECONDARY MARKET
 GOVERNMENT REGULATIONS
 PROVIDES LIQUIDITY
 DEBT AND EQUITIES INSTRUMENTS
 TRANSACTIONS IN OPEN MARKETS

10. SAVINGS MOBILIZATION
FORMATION OF CAPITAL
ECONOMIC GROWTH AND DEVELOPMENT
INCREASE IN PROFITABILITY
PURCHASE AND BUY OF SECURITIES
CONTINOUS AVAILABILITY OF FUNDS
RISK MANAGEMENT
DEVELOPMENT OF ENTREPRENEURSHIP
RAISING LONG TERM CAPITAL
MAXIMUM UTILISATION OF CAPITAL RESOURCES

11. CAPITAL MARKET
INDUSTRIAL
SECURITIES
MARKET
PRIMARY MARKET
OR NEW ISSUE
MARKET
PUBLIC ISSUE
PRIVATE
PLACEMENTS
RIGHTS ISSUE
SECONDARY
MARKET OR
STOCK
EXCHANGE
GOVERNMENT
SECURITIES
MARKET
LONG TERMS
LOANS MARKET
TERM LOAN
MARKET
MARKET FOR
MORTGAGAES
MARKET FOR
FINANCIAL
GURANTEES

12. PRIMARY MARKET
The primary market is also known as the new issues market.
It deals with new securities being issued for the first time.
It has no particular place
It has various methods of float capital, such as Public issues, Offer for sales, Private placement Right
issue and Electronic –initial public offer.
The function of Primary market is to facilitate the transfer of investible funds to entrepreneurs,
seeking to establish new enterprises or to expand existing ones, through the issue of securities for the
first time

13. SECONDARY MARKET
 The secondary market is also known as the stock market. It is a market for the sell and
purchase of existing securities.
 Secondary market is also called after market is the financial market in which previously
issued financial instruments such as stock, bonds, option and future are bought and sold.
 The main function of secondary market :securities are sold by and transferred from one
investor or speculator to another. • It create liquidity.
 It has particular place

14. EQUITY SHARES
PREFERENCE SHARES
BONDS
DEBENTURES
GOVERNMENT SECURITIES
EQUITY SHARES WITH DETACHABLE WARRANTS
SWEAT EQUITY SHARES
FIXED DEPOSIT
PUBLIC DEPOSITS
FOREIGN EXCHANGE MARKET

15.  RAPID DEVELOPMENT OF CAPITAL MARKET
 STRONG EFFORTS TO SAFEGUARD THE INTEREST OF THE SMALL
INVESTORS
 HEAVY INCREASE IN THE NUMBER OF INVESTORS IN THE CAPITAL
MARKET
 RAPID INCREASE IN THE NUMBER OF LISTED COMPANIES AND
SECURITIES AND INFLATIONARY TRENDS
 CONTINUING INCREASE IN THE NUMBER OF PUBLIC COMPANIES AND
THE AMOUNT OF THEIR PAID UP CAPITAL
 INCREASE IN NUMBER OF MUTUAL FUNDS
 INCREASE IN NUMBER OF STOCK EXCHANGE CENTRES AND THEIR
BUSINESS
 CONTINUING INCREASE IN FINANCIAL ASSISTANCE PROVIDED BY
FINANCIAL INSTITUTIONS
 INCREASE IN CIRCULATION OF CONVERTIBLE DEBENTURES
 STRONG TENDENCY OF REVOLUTIONARY REFORMS AND
LIBERALISATION.