Lesson 4 of 1233% complete

Primary Market vs Secondary Market

IPO, FPO, Rights Issue, and Secondary Trading.

Primary Market - Where New Shares Are Born

The primary market is where companies issue new shares to the public for the first time (IPO) or additional shares (FPO). Money goes directly to the company. Example: When Zomato launched its IPO in 2021 at ₹76 per share, it raised ₹9,375 crore directly from investors.

Secondary Market - Where Shares Are Traded

After the IPO, shares trade between investors on the secondary market (NSE/BSE). The company does not receive money from secondary trades. When you buy Reliance shares on NSE today, you are buying from another investor, not from Reliance.

Primary vs Secondary Market

Feature	Primary Market	Secondary Market
Who sells?	Company	Other investors
Money goes to	Company	Seller (investor)
Price set by	Company/Book building	Demand & Supply
Example	IPO subscription	Daily NSE/BSE trading

Key Points

•Primary market: Company sells new shares directly to investors
•Secondary market: Investors trade shares among themselves
•IPO = Initial Public Offering (first time listing)
•Company gets money only from primary market transactions

Tips

💡 Research thoroughly before applying for IPOs
💡 Not all IPOs are profitable - many list below IPO price

Common Mistakes to Avoid

⚠️ Applying for every IPO without research
⚠️ Not understanding the difference between issue price and market price

FAQ

Lesson Quiz

Test your understanding. Score 3/5 or higher to mark lesson complete.

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