Define primary market. State any four methods of issuing securities in the primary market.
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Primary market is a market in which new securities are issued for the first time to the investors.
The methods of floating new issues in the primary market are:
(i) Offer Through Prospectus: It is the method of floating new issues by inviting subscriptions from the public through issue of prospectus.
(ii) Offer for Sale: It is the method in which the securities are not issued directly to the public but through intermediaries like issuing houses or stock brokers.
(iii) Private Placement: It refers to the allotment of securities by a company to institutional investors and some selected individuals.
(iv) Rights Issue: It is the privilege given to existing shareholders to subscribe to new issue of shares in proportion to the number of shares they already hold.
(v) e-IPO: It refers to issuing securities through the online system of stock exchange.
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