Page 98 - VIRANSH COACHING CLASSES

B) Capital Market in India : 1) Government Securities Market : It is
Meaning : also known as the gilt-edged market. It
Capital market is a market for long term funds deals in government and semi-government
both equity and debt raised within and outside the securities. Such securities carry a fixed rate
country. It is also an important constituent of the of interest.
financial system. Development of an effective 2) Industrial Securities Market : It deals
capital market is necessary for promoting more with the shares and debentures issued by
investments as well as achieving economic old and new companies. It is further divided
growth. The demand for long term funds comes into Primary Market (New Issues) and
from agriculture, trade and industry. Individual Secondary Market (Old Issues). Primary
savers, corporate savings, banks, insurance market helps to raise fresh capital through
companies, specialized financial institutions are sale of shares and debentures. Secondary
the suppliers of long term funds. market deals with securities already issued
by companies. Secondary markets function
through stock exchanges.
Stock exchange is an important
constituent of the capital market. It is an
association or organization in which stocks,
bonds, commodities etc are traded. Bombay
Stock Exchange (BSE) and National Stock
Exchange (NSE) are the premier stock
exchanges in the country.

3) Development Financial Institutions
Fig. 9.4 (DFIs) : They provide medium term and
long term financial assistance to the private
Structure of Capital Market in India :
The capital market in India comprises of sector. They include Industrial Finance
the Gilt-Edged or the Government Securities Corporation of India (IFCI), Industrial
Market, Industrial Securities Market, Investment Bank of India (IIBI), EXIM
Development Financial Institutions and Bank etc.
Financial Intermediaries. 4) Financial Intermediaries : Financial
Fig. 9.5, explains the structure of India’s intermediary is an organization which
Capital Market. acts as a link between the investor and the

Indian Capital Market

Government Securities Industrial Securities Market Development Financial Institutions Financial Intermediaries

New Issues Market Old Issues Market

IFCI ICICI SFCs IDBI IIBI UTI

Merchant Banks Mutual Funds Leasing Companies Venture Capital Companies Others
Fig. 9.5

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