Role of Indian Primary Market in Mobilization of Resources

The pace of economic growth and development of any country depends upon its sound financial system. Financial system promotes savings and investment in the economy and enlarges the resources flowing into the financial assets which are more productive than the physical assets. Financial market has significant role to play in this context because it is a part of the financial system. It provides the financial resources needed for the long term and sustainable development of different sectors of the economy. Primary Market is also known as the new issue market. It is the market for issuing new securities. In the primary market the securities are purchased directly from the issuer, which is not in the case of the secondary market. The primary market is a market for new capital that will be traded over a longer period. A company's new offering is placed on the primary market through an initial public offer. When shares are bought in an IPO it is termed as primary market. The primary market does not involve the stock exchanges. Stocks available for the first time are offered through new issue market. Resources can be mobilized either for short term or for long term. Economy consists of huge number of enterprises and individuals, requirements of all of them differ. Some have surplus cash to save, while some other needs cash. Some firms/individuals wants to make good there short term liquidity requirements, some wants money for long term capital investment. The primary market help these investors to mobilize there finance. Thus the aim of the study is to understand the role of Indian primary market in resource mobilization for last two years. It covers the method of resource mobilization like offer for sale, private placement, qualified institution investor, right issues and so on for last two years. The study is exploratory in nature. The data from government websites like SEBI, ministry of finance, economic review. In addition the study uses article, journals and newspaper for reference.