The 2 Types Of Markets In Equity Market? Primary Market Vs. Secondary Market! Know All About The 2 Markets! (#6)

The 2 Types of Markets in the Equity Market: Primary vs. Secondary

Within the equity market, transactions happen in one of two distinct markets: the Primary Market and the Secondary Market. Here's the difference between the two.

Primary Market

Whenever a company issues shares for the first time — through an IPO, or later through a fresh issue of new shares — anyone buying those shares is buying directly from the company itself. This is known as the Primary Market.

In other words: whenever a company is directly involved in the sale — whether that's an IPO or a subsequent new share issue — the transaction falls under the Primary Market.

→ Related: What Is a DRHP/RHP?(#3) — the filing that precedes every Primary Market issuance.

Secondary Market

Once a company has sold off its shares from an IPO (and isn't currently issuing new ones), anyone looking to buy those shares afterward has to buy them from another investor — not from the company itself. This ongoing exchange of shares between investors, with no direct company involvement, is known as the Secondary Market.

In other words: whenever shares are exchanged purely between investors — regardless of how many times that particular share has already changed hands — it's a Secondary Market transaction.

→ Related: What Is the Share Market?(#2) — most day-to-day trading you'll do as an individual investor happens here.

Does It Matter Which Market You're Buying In?

In practice, there's no meaningful difference in your experience as an investor between the two. What actually moves is the share's price and value over time — driven by demand, company performance, and other market factors — regardless of which market the transaction technically falls under.

→ Related: Who Decides the Price/Value of Shares in the Share Market?(#4)

Any questions about the difference between the two markets? Let us know in the comments.

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