- A capital market (locally – share market) is an organized market in which capital is raised by the investment made by general public in the form of shares, debentures, bonds, etc.
- When companies issue equity shares in the market, investors buy them. The money invested becomes the capital for the company who issued the shares. So, the companies and industries get fund through the savings of general public.
Capital market is divided into two markets. They are:
- Primary market and
- Secondary Market
- Capital market is a source of long term capital fund for industrial enterprises.
- Long term securities like shares and debentures are traded in capital market.
- Capital market is a market for all types of securities including industrial securities and government securities.
- Since this market mobilizes savings of the community, it boosts economic growth.
