India’s capital markets are witnessing a bit of a paradox: the primary markets are suddenly buoyant, even as the secondary markets have been largely flat over the last 12 months. On the surface, it looks like investor confidence is high, but scratch deeper, and the picture gets more complex.

The incongruity lies in the fact that the primary markets usually mirror the trend in the secondary markets. The primary market is one where a company sells new securities directly to investors to raise capital for business growth through an initial public offering ( IPO ) or other issuances, while the secondary market is where existing, and previously issued securities are traded among investors, providing liquidity and continuous opportunities for buying and selling.

Since the primary market cr

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