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    Capital Market

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    deepika90236
    The document discusses various types of financial markets in India including the capital market, money market, derivatives market, foreign exchange market, and commodity market. It provides details on the capital market, describing it as a market that allows governments and companies to raise long-term financing through instruments like equity, bonds, and insurance. Key elements of India's capital market are discussed including historical developments, major reforms, participants like corporations and investors, and regulatory bodies like SEBI.

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    Capital Market

    Uploaded by

    deepika90236
    817 views16 pages
    The document discusses various types of financial markets in India including the capital market, money market, derivatives market, foreign exchange market, and commodity market. It provides details on the capital market, describing it as a market that allows governments and companies to raise long-term financing through instruments like equity, bonds, and insurance. Key elements of India's capital market are discussed including historical developments, major reforms, participants like corporations and investors, and regulatory bodies like SEBI.

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    The document discusses various types of financial markets in India including the capital market, money market, derivatives market, foreign exchange market, and commodity market. It provides details on the capital market, describing it as a market that allows governments and companies to raise long-term financing through instruments like equity, bonds, and insurance. Key elements of India's capital market are discussed including historical developments, major reforms, participants like corporations and investors, and regulatory bodies like SEBI.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    817 views16 pages

    Capital Market

    Uploaded by

    deepika90236
    The document discusses various types of financial markets in India including the capital market, money market, derivatives market, foreign exchange market, and commodity market. It provides details on the capital market, describing it as a market that allows governments and companies to raise long-term financing through instruments like equity, bonds, and insurance. Key elements of India's capital market are discussed including historical developments, major reforms, participants like corporations and investors, and regulatory bodies like SEBI.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
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    The key takeaways from the document are the different types of financial markets in India including the capital market, money market, derivatives market, foreign exchange market and commodity market. It also discusses what a capital market is, its characteristics and instruments. Additionally, it covers the history and reforms of the Indian capital market as well as the factors contributing to its growth.

    The different types of financial markets in India mentioned are the capital market, money market, derivatives market, foreign exchange market and commodity market.

    A capital market is a market where governments and companies can raise long-term funds. It is characterized as a provider of long-term financing using instruments like equity, bonds, insurance and derivatives. The capital market includes the stock market and bond market.

    Types of Financial market in India

    Capital Market Money Market Derivatives market Foreign Exchange market Commodity Market Insurance Market Mutual Fund Market

    What is Capital Market?


    A capital market is simply any market where a government or a

    company can raise money (capital) to fund their operations and long term investment. Selling bonds and selling stock are two ways to generate capital, thus BOND MARKET and STOCK MARKET are considered capital markets.
    Capital Market is characterized as the provider of long-term financing.

    The instruments used for this long-term financing are equity instruments, insurance instruments, derivative instruments and bonds.
    Other examples of capital market instruments include equity, floating

    rate bonds, convertible bonds, asset backed securities, mortgage backed securities, and interest rate swaps.

    Why Capital Markets Exist


    Capital markets facilitate the transfer of capital (i.e.

    financial) assets from one owner to another.

    They provide liquidity.


    Liquidity refers to how easily an asset can be

    transferred without loss of value.

    A side benefit of capital markets is that the transaction

    price provides a measure of the value of the asset.

    Indian Capital Market - Historical perspective


    Stock Market was for a privileged few
    Lack of Transparency - High tones costs No use of Technology Outdated banking system Volumes - less than Rs. 300 cr per day

    Indian Capital markets Chronology


    1994-Equity Trading commences on NSE
    1995-All Trading goes Electronic 1996- Depository comes in to existence

    1999- FIIs Participation- Globalisation


    2000- over 80% trades in Demat form 2003- T+2 settlements in all stocks

    Factors contributing to growth of Indian Capital Market

    Establishment of Development banks & Industrial financial institution. Legislative measures Growing public confidence Increasing awareness of investment opportunities Growth of underwriting business Setting up of SEBI Mutual Funds Credit Rating Agencies

    Capital Markets - Reforms


    Each scam has brought in reforms - 1992 / 2001 Screen based Trading through NSE Capital adequacy norms stipulated Dematerialization of Shares - risks of fraudulent paper eliminated Entry of Foreign Investors Introduction of Derivative products - Index / Stock Futures &

    Options

    Margin Lending

    Capital Market v/s Money Market


    Extends beyond one year Term loans and financial leases, corporate equities, and bonds. Upto One year or less. Federal agency securities, commercial paper

    Fixed Capital Requirement.


    Instruments have Primary as well as secondary market Formal place for transactions e.g.. Stock market

    Working Capital Requirement.


    Instruments have only Primary market No Formal place for transactions

    Indian Capital Market

    Market

    Instruments

    Intermediaries Regulator
    SEBI

    Primary

    Secondary

    Brokers Investment Bankers Stock Exchanges Underwriters

    Equity

    Debt

    Players

    CRA

    Corporate

    Intermediaries

    Individual

    Banks/FI

    FDI /FII

    Functions Of SEBI

    Regulates Capital Market. Checks Trading of securities. Checks the malpractices in securities market. It enhances investor's knowledge on market by providing education. It regulates the stockbrokers and sub-brokers. To promote Research and Investigation

    Instruments in Secondary Market Debenture


    Equity

    Giltz securities
    Derivatives Hedge funds FCCB

    What is a Share or a Stock?


    In financial markets, a share is a unit of account for various financial

    instruments including stocks (ordinary or preferential).


    In simple Words, a share or stock is a document issued by a company,

    which entitles its holder to be one of the owners of the company. A share is issued by a company or can be purchased from the stock market.
    The common feature of all these is equity participation & limited in the

    case of preference shares .

    IPO & Its Important Terminology


    Investment Bankers & Underwriters Registrar

    Issue of Prospectus
    Price Band

    Allotment
    Listing

    Book building process Appointment of book runner i.e. merchant banker


    Preparation and submission of draft documents to SEBI and obtaining of an acknowledgement card. A specified price band (range) is to be determined by issuer and book runner Different price levels are invited from syndicate members .Adv. Should mention opening and closing dates for the bids Issuer arrives at a final cut-off rate & final allocation in consultation with book runner and lead manager Issuer and book runner may impose restrictions on number of shares that can be allotted to each client Final prospectus is filed with the (ROC) along with procurement agreement Placement portion opens for subscription Placement portion closes a day before the opening of public issue portion

    The role of the stock exchange


    Creates investment opportunities for small investors

    Government raises capital for development projects

    Barometer of the economy

    Stock Exchanges in INDIA



    Mangalore Stock Exchange Hyderabad Stock Exchange Uttar Pradesh Stock Exchange Coimbatore Stock Exchange Cochin Stock Exchange Bangalore Stock Exchange Saurashtra Kutch Stock Exchange Pune Stock Exchange National Stock Exchange OTC Exchange of India Calcutta Stock Exchange Inter-connected Stock Exchange (NEW) Madras Stock Exchange

    Bombay Stock Exchange


    Madhya Pradesh Stock

    Exchange Vadodara Stock Exchange The Ahmedabad Stock Exchange Magadh Stock Exchange Gauhati Stock Exchange Bhubaneswar Stock Exchange Jaipur Stock Exchange Delhi Stock Exchange Assoc Ludhiana Stock Exchange

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