comprehensive study of Financial Markets

Explore how financial markets split into capital and money markets, with capital dividing into equity and debt, while equity markets include primary, secondary, and derivative segments with futures and options.

The money market is a collection of interrelated submarkets with free movement of funds, a broad network of participants, and innovative instruments.

Contrast capital and money markets by maturity, instruments, and market structure. Identify central bank influence, risk differences, and roles of primary and secondary markets, with treasury bills and shares.

Explore how major stock exchanges—NYSE, Nasdaq, London Stock Exchange, Bombay Stock Exchange, and National Stock Exchange—operate through floor versus electronic trading, listing criteria, and diverse services.

Explain the functions of stock exchanges, including creating a continuous, liquid market for securities, enabling liquidity, fair price discovery, and mobilizing savings into long-term funds.

Explore what a stock market index is and how it tracks performance, reflecting average returns and future expectations. Learn examples like Dow Jones, FTSE, Sensex, and Nifty.

Identify stock market participants from diverse backgrounds and explain why regulation matters. Describe roles of brokers, banks, credit rating agencies, asset managers, and foreign investors in market activity.

Explore capital market instruments, with bonds and stocks as the primary long-term tools that support capital formation. The lecture also introduces depository receipts and derivatives as typical investment instruments.

Go public to raise funds for capex, avoid debt costs, and spread ownership. Explain merchant bankers' roles in the IPO process, including due diligence, underwriting, price band, and roadshows.

Explore how an IPO raises funds in the primary market by selling securities to the public, enabling going public, liquidity, and access to cheaper capital for growth.

Understand offer documents for public and rights issues, including draft offer documents, red herring prospectus, and prospectus, and learn how they disclose the company, promoters, projects, and finances.

Learn how IPO pricing works, including fixed price and book-building methods, price discovery through demand, offer document disclosures, and peer comparisons to set the issue price.

Explain how book building works as a price discovery process using a 30–40 band, bids, cumulative demand, a cutoff price to allocate shares, and refunds to below-cutoff bidders.

Walk through a book-building case study to show how cumulative demand across a price band determines the cutoff price and share allotment for bidders.

Explore the book building process as a price discovery mechanism, covering price bands, the role of book running lead managers, bid reception, cutoff prices, allotment, and the final prospectus.