1. Introduction to Capital Market
Mrunal Joshi

2. Introduction Economy and Financial System
Capital Market and Financial System
Meaning of Capital Market: It is a market for long-term funds—both equity and debt—and funds raised within and outside the country.
The capital market aids economic growth by mobilising the savings of the economic sectors through financial system and directing the same towards channels of productive use.

4. Indian Financial System Informal (Unorganised)
Formal (Organised)
Regulators: MoF, SEBI, RBI, IRDA
Financial Institutions (Intermediaries)
Financial Markets
Financial Instruments
Financial Services
Informal (Unorganised)
Money Lenders, Local Bankers, Traders, Landlords
MoF: Ministry of Finance
SEBI: Security Exchange Board of India
RBI: Reserve Bank of India
IRDA: Insurance Regulatory and Development Authority

5. Financial Institutions
(Intermediaries)
Banking Institutions
Commercial Banks,
Cooperative Banks
Non-Banking Institutions
Finance Companies
Development Finance Institutions:
IDBI, SIDBI, NABARD, SFCs, ECGC, DIGC
Mutual Funds
Insurance and Housing Finance Companies

6. Primary and Secondary Market of:
Financial Markets
Capital Market
Equity Market
Primary Market
* Public Issue
* Private Placement (Domestic and International)
Secondary Market
NSE, BSE, OTCEI, ISE, Regional SEs
Derivative Market (F&O) (SEs Based)
Stock and Index based Derivatives
Debt Market
Private Corporate Debt, PSU Bonds, Govt Sec. Mkt
Money Market
Primary and Secondary Market of:
Treasury Bill, Call Money Mkt, Commercial Bills, Commercial Papers, Certificates of Deposit, Term Money

7. Financial Instruments
Types
Primary Securities
Secondary Securities
Terms:
Short, Medium, Long

8. Financial Services Depositories Custodial Credit Rating Factoring
Forfaiting
Merchant banking
Leasing
Hire Purchasing
Guaranteeing
Portfolio Management
Underwriting

9. Notes: IDBI : Industrial Development Bank of India
IFCI : Industrial Finance Corporation of India
SIDBI : Small Industries Development Bank of India
IDFC : Infrastructure Development Finance Company Limited
NABARD: National Bank for Agriculture and Rural Development
EXIM Bank : Export-Import Bank of India
SFC : State Financial Corporation
SIDC : State Industrial Development Corporation
ECGC : Export Credit Guarantee Corporation of India
DICGS : Deposit Insurance and Credit Guarantee Corporation
OTC : Over the Counter
NHB : National Housing Bank

11. Importance of capital market
Mobilize long-term savings to investment
Provides equity capital to entrepreneurs
Productive use of financial resources
Provides liquidity
Lower cost of transaction and information
Competitive pricing in Capital allocation
Quick valuation of financial instrument
Insurance against investment risk – Derivatives
Wider participation – network of institutions and experts
Improvement in operational efficiency

12. Recent Trend in Capital Market
Economic Growth: growth is projected to rebound to 7.2 per cent in Financial Year (FY) and further to 7.7 per cent in FY   (IMF), ET April 21, 2017
Inflation: While the consumer price inflation (CPI) eased to 2.99% in April from 3.89% in March, the WPI inflation fell sharply to 3.85% in April from 5.3%. (HT, July )
(Source:

13. Primary Market: In the first nine months of 2016, 21 IPOs from across sectors have raised Rs 19, crore, the highest for the January-September period since 2007, when 81 IPOs raised Rs 28, crore. (ET, Oct 29, 2016)

14. Secondary Market: The market capitalisation of NSE and BSE has surged by 37% in the past 1 year. The turnover of the cash segment of stock exchanges across India has increased by 55% from 2013–2014 to 2014–2015.
Derivatives Market: The equity derivatives market turnover on the Indian exchanges increased from Rs. 4,74,308 billion in FY 2014 to Rs billion in FY 2015.
Mutual Funds: As on March 31, 2015, the number of MFs registered with the SEBI was 47; this number remained the same until the end of September While there were 1,638 schemes in 2013–2014, there were 1,884 MF schemes as on March 31, 2015.
Foreign Institutional Investor in India: In 2015–2016, the net FPI investments were negative in most of the months. In July 2015, the net investment of Rs. 360,460 million (US$ 6,009 million) by FIIs was the highest monthly net investment in 2015–2016. The number of SEBI-registered FIIs declined to 1,444 in 2014–2015 from 1,710 in the previous year. In 2014–2015, the net FII investment in equity surged by 40%, compared to a decline of 43% in the previous fiscal year. The FII gross turnover in the futures and options (F&O) segment of the stock exchanges in 2014–2015 was Rs. 124,648,816 million, which was 8.2% of the total turnover in the F&O segment in the Indian capital markets.

15. References
Pathak, B. V. (2014). Indian Financial System (Fourth Ed.): Pearson Education India.
A Review Indian Securities Market. (2015) (Vol. XVIII, pp ). Mumbai: National Stock Exchange of India.