Capital Market

Capital market is the market which is concerned with long-term finance for industry and government.The savings of individuals and institutions are converted into investment through capital issued by companies and public loans floated by government and semi government bodies. Capital market facilitates dealings in financial assets that have a long or indefinite period of maturity. It constitutes (a) raising of capital by issued of new shares, (b) raising of borrowing by issue of new debentures, (c) raising of long-term borrowings by inland and foreign banks and financial institutions.

The major constituents of the capital market are the investors and the organisations which mobilise savings and chanalise them into investment channels. Investors of funds may be individuals, companies and the financial institutions. The bodies which mobilise savings may be banks, investment trusts, specialized financial corporations and stock exchange.