INDUSTRIAL SECURITIES MARKET

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The market for industrial securities is known as industrial securities market. It is an ideal market for corporate securities such as bonds and equities. Business organisations raise capital through three major types of securities. They are (a) ordinary shares (b) preference shares and (c) debentures or bonds. Ordinary shares and preference shares are also known as ‘equities’. These are the major primary securities in the financial markets of any country. They differ in their investment characteristics and as such satisfy different preferences of various investors and enjoy different degrees of popularity.

Securities markets’ performance in terms of information-processing, risk management and liquidity-provision functions improved further in 2005. In December 2005, there were 2,540 companies, where stock market trading took place on at least two-thirds of the days. These companies had a market capitalization of Rs.24.7 lac Crore or $550 billion. Household and institutional investor participation increased through growing confidence in the transparency and robustness of the market design which was put in place over the period 1993-2001. Such participation was also assisted by stock market index returns of 11 per cent in 2004 followed by 36 per cent in 2005.

Three industries viz. Banks/FIs, Engineering and Telecommunications accounted for 93.2 per cent of the resourced mobilized in 2001-02.  In the current year, the same three industries accounted for 84.7 per cent of the funds raised.  With the banks and FIs, increasing their share from 68.3 per cent to 84.5 per cent and companies in the Telecommunications sector and raising any resourced.  In 2002-03 the three industries which accounted for 95.3 per cent of the resources where Banking/FIs, Information Technology, Paper and Pulp.

 

 

 

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