Understanding the Primary Market

“In the short run, the market is a voting machine. But in the long run, it's a weighing machine.”


Benjamin Graham


After reading this chapter, you will be able to:

  1. Understand the nature of the primary market.

  2. Look at the different modes of issues in the primary market.

  3. Understand the regulatory framework of the primary market.

  4. Discuss the free pricing of issues.

  5. Understand the methods of pricing issues.

  6. Analyse the marketing strategies for new issues.


The Bombay Stock Exchange (BSE) has recently introduced the BSE-IPO index which tracks the primary market conditions in the capital market. The primary market is the market where companies issue their securities ...

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