The document defines and describes several types of securities offerings and markets, including initial public offerings (IPOs), rights issues, qualified institutional placements (QIPs), primary and secondary markets, Indian depository receipts (IDRs), market orders, and over-the-counter (OTC) markets. An IPO refers to the first sale of stock by a private company to the public. A rights issue allows existing shareholders to purchase additional shares at a discount. A QIP allows Indian companies to raise capital domestically without pre-issue filings. The primary market involves the initial sale of securities, while the secondary market refers to subsequent trading of existing securities among investors.

1. IPO
The first sale of stock by a private company to the public. IPOs are often issued by
smaller, younger companies seeking the capital to expand, but can also be done by large
privately owned companies looking to become publicly traded.
The object of an IPO may be relating to expansion of existing activities of the Company
or setting up of new projects or any other object as may be specified by the Company in
its offer document or just to get its existing equity shares listed by diluting the stake of
existing equity shareholders through offer for sale.
In an IPO, the issuer obtains the assistance of an underwriting firm, which helps it
determine what type of security to issue (common or preferred), the best offering price
and the time to bring it to market.
Also referred to as a "public offering."
IPOs can be a risky investment. For the individual investor, it is tough to predict what
the stock will do on its initial day of trading and in the near future because there is often
little historical data with which to analyze the company. Also, most IPOs are of
companies going through a transitory growth period, which are subject to additional
uncertainty regarding their future values.
For more info refer: http://www.nseindia.com/getting_listed/content/ipo_listing.htm
Rights Issue
An issue of rights to a company's existing shareholders that entitles them to buy
additional shares directly from the company in proportion to their existing holdings,
within a fixed time period. In a rights offering, the subscription price at which each share
may be purchased in generally at a discount to the current market price. Rights are
often transferable, allowing the holder to sell them on the open market.
QIP
A designation of a securities issue given by the Securities and Exchange Board of India
(SEBI) that allows an Indian-listed company to raise capital from its domestic markets
without the need to submit any pre-issue filings to market regulators. The SEBI
instituted the guidelines for this relatively new Indian financing avenue on May 8, 2006.
Prior to the innovation of the qualified institutional placement, there was concern from
Indian market regulators and authorities that Indian companies were accessing
international funding via issuing securities, such as American depository receipts (ADRs),
in outside markets. This was seen as an undesirable export of the domestic equity
market, so the QIP guidelines were introduced to encourage Indian companies to raise
funds domestically instead of tapping overseas markets.
Primary Market

2. The primary market is where securities are created. It's in this market that firms sell
(float) new stocks and bonds to the public for the first time. For our purposes, you can
think of the primary market as being synonymous with an initial public offering (IPO).
Simply put, an IPO occurs when a private company sells stocks to the public for the first
time.
IPOs can be complicated because many different rules and regulations dictate the
processes of institutions, but they all follow a general pattern:
1. A company contacts an underwriting firm to determine the legal and financial details
of the public offering.
2. A preliminary registration statement, detailing the company's interests and prospects
and the specifics of the issue, is filed with the appropriate authorities. Known as a
preliminary prospectus, or red herring, this document is neither finalized nor is it a
solicitation by the company issuing the new shares. It is simply an information pamphlet
and a letter describing the company's intent.
3. The appropriate governing bodies must approve the finalized statement as well as
a final prospectus, which details the issue's price, restrictions and benefits, and is issued
to those who purchase the securities. This final prospectus is legally binding for the
company.
The important thing to understand about the primary market is that securities are
purchased directly from an issuing company.
IDR
A foreign company can access Indian securities market for raising funds through issue of
Indian Depository Receipts (IDRs). An IDR is an instrument denominated in Indian
Rupees in the form of a depository receipt created by a Domestic Depository (custodian
of securities registered with the Securities and Exchange Board of India) against the
underlying equity of issuing company to enable foreign companies to raise funds from
the Indian securities Markets.
For further info: http://www.nseindia.com/getting_listed/content/ind_dep_rec.htm
Secondary Market
The secondary market is what people are talking about when they refer to the "stock
market". This includes the New York Stock Exchange (NYSE), Nasdaq and all major
exchanges around the world. The defining characteristic of the secondary market is that
investors trade among themselves. That is, in the secondary market, investors trade
previously issued securities without the issuing companies' involvement. For example, if
you go to buy Microsoft stock, you are dealing only with another investor who owns
shares in Microsoft. Microsoft (the company) is in no way involved with the transaction.

3. Market Order
An order that an investor makes through a broker or brokerage service to buy or sell an
investment immediately at the best available current price. A market order is the default
option and is likely to be executed because it does not contain restrictions on the
buy/sell price or the timeframe in which the order can be executed.
A market order is also sometimes referred to as an "unrestricted order."
The OTC Market
Sometimes you'll hear a dealer market referred to as an over-the-counter (OTC) market.
The term originally meant a relatively unorganized system where trading did not occur at
a physical place, as we described above, but rather through dealer networks.
The term "over-the-counter" refers to stocks that are not trading on a stock exchange
such as the Nasdaq, NYSE or American Stock Exchange (AMEX). This generally means
that the stock trades either on the over-the-counter bulletin board (OTCBB) or the pink
sheets. Neither of these networks is an exchange; in fact, they describe themselves as
providers of pricing information for securities. OTCBB and pink sheet companies have far
fewer regulations to comply with than those that trade shares on a stock exchange. Most
securities that trade this way are penny stocks or are from very small companies.