Primary Market refers to the segment of the capital market where new securities are issued and sold for the first time. It serves as the platform through which companies raise fresh capital directly from investors to fund expansion, repay debt, or finance new projects. This process helps businesses access long-term funding while providing investors an opportunity to participate in a companyís growth from the very beginning.

In the primary market, securities such as shares, debentures, and bonds are issued through methods like Initial Public Offer (IPO), Follow-on Public Offer (FPO), Rights Issue, and Private Placement. Among these, IPOs are the most well-known, as they allow a company to list its shares on a stock exchange for the first time. Once issued, these securities are later traded in the secondary market, which provides liquidity to investors.

The role of SEBI (Securities and Exchange Board of India) is crucial in regulating the primary market. SEBI ensures transparency, investor protection, and fair pricing of issues. It mandates detailed disclosures in the companyís prospectus so that investors can make informed decisions based on verified data. The regulator also oversees the process of book building and allotment to maintain fairness and efficiency.

Investing in the primary market offers benefits such as the potential for long-term capital appreciation and the chance to buy shares at the issue price before they are listed. However, it also carries risks, as future market performance and company profitability can vary. Therefore, investors should carefully review the companyís financial statements, objectives of the issue, and valuation before applying for any new offer.

In summary, the primary market plays a vital role in capital formation and economic growth by channeling investor savings into productive business ventures, under strict regulatory oversight to safeguard investor interests.