Securties Market is a place where buyers and sellers can do transactions of there securities. So what is meant by securities?? The Securities Regulation act of 1956 defines securities as “instruments such as bonds, shares, debentures or any other marketable money of any corporate or govt. bodies which are declared as securities by central govt“. This is like transfer of idle resources in hands of common people(investors) to corporates who are in need of money.Which will act as an investment and a working capital for different parties.A more formal definition can be; a securities markets provide channels for reallocation of savings to investments and entrepreneurship.Another important term which needs to be mentioned here is about the regulatory body of a securties market and its need.

The regulator ensures that the participants in the market play fair games and the interest of investors are protected. In India this responsibilty is shared by Department of Economic Affairs (DEA), Department of Company Affairs (DCA), Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI). Now the participants of the securities market, there are three categories mainly, the issuers of securities, investors in securities and the intermediaries like stock brokers and merchant bankers. An intermediary is required or not can be decided by an investor.But its better we have an intermediary for acquiring dematerialisation accounts(DEMAT).Make sure you choose a SEBI registered intermediary.The securities market has two segments, primary market and secondary market. The primary market serves the purpose of new issues only, whereas the secondary market caters the previously issued securities.

Primary Market:
                       provides the channel for sale of new securities. Securities can take the form of debt instruments, equities etc.The issuers can issue it at a face value or at a discounted price or at a premium price (which is the case in 99.99%) and thus raise a capital amount for further development of companies. Face value of a share is the original cost of the stock shown on the certificate, whereas for a bond its the amount paid to the holder on the completion of the maturity period.A security can be sold at its face value, at a premium or at a discount.A premium means more than the face value and a discount means less than the face value.

How & Why a security or a share comes into existance?? Every big corporates where once ignited by a person or a group, with their brains and personal money and borrowings from banks. But at a later point of time the need for money became very intense that even bank loans can’t help, and its at this point the securities market plays a vital role helping the budding entrepreneurs by providing money for running the business.The way to invite “capital” from the public is through a ‘Public Issue’. A public issue is an offer to the public to subscribe to the share capital of a company. Once this is done, the company allots shares to the applicants as per the rules and regulations laid down by SEBI. An Initial Public Offer(IPO) is an unlisted company’s issue of securities to the public for the first time.This will give way for the listing and trading of the issuers securities.”Further Issue” is when an already listed company makes either a fresh issue of securities to the public or an offer for sale to the public, through an offer document.

There are a few other reasons for an IPO (other than the money aspect),For eg: when TCS launched its IPO, it had plenty of cash in hand and never needed any extra chunk.They went public, just to get the positive impact on brand when a company is listed in stock markets. In a Post IPO talk Mr.S.Mahalingam CFO Tata Consultancy Services mentioned a few reasons for TCS going public,the points he listed were
1. The tax advantages given by the government for software exports.
2. The dot com boom in India in late 90’s.
3. The increase in size of employees in TCS and the employee perspective to work for a listed company.
One other reason for an IPO is, if promoters want an exit, then IPO is the best way.

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