Course

Unit 1

Introduction: Concept of capital market – importance and role – components of a capital market – Government Securities Market – foreign exchange market – derivatives market – concept of money market – distinction between capital market and money market – money market institutions.

Unit 2

Structure of Capital markets: Institutions in capital market – new issues market – instruments in capital market – role of new issues in raising finance – steps to be followed in floating a new issue – role of stockbrokers and underwriters.

Unit 3

Securities Market in India: Origin and emergence of the securities market – types of securities – history of stock exchange in India – trading in a stock exchange – procedure of listing shares – investment environment – sources of investment information for existing and new investors.

Unit 4

Regulation and Control of Stock Exchanges: Securities Contract Act, 1956 – SEBI Act, 1986 –

Amendments to SEBI Act – guidelines relating to capital issues – steps to protect investors.

Unit 5

Mutual Funds: Importance and role of mutual funds – schemes – advantages and shortcomings –

role of credit rating, Credit rating agencies of India – CRISIL – IICRA – CARE – Limitations of rating.

Course Objective:

To give an understanding on Indian capital markets, fund raising processes, securities market, regulatory frameworks, mutual funds analysis, and critique of credit rating agencies.

Course outcomes:

The students will be able to:

CO1. Understand the significance of capital markets, including government securities, foreign exchange, and derivatives, distinguishing them from money markets and identifying key institutions.

CO2. Understand the structure of capital markets, including institutions and instruments, along with the process of raising finance through new issues, involving stockbrokers and underwriters.

CO3. Gain a comprehensive understanding of India’s securities market, encompassing its origin, evolution, types of securities, stock exchange history, trading procedures, share listing, investment environment, and information sources for investors.

CO4. Gain a comprehensive idea on the regulatory framework of stock exchanges, including the Securities Contract Act and SEBI Act, and understand investor protection measures and capital issue guidelines.

CO5: Analyze the significance of mutual funds, assess schemes, and evaluate the benefits and drawbacks. Examine credit rating agencies in India and critique their limitations.

Textbooks:

1. Gordon and Natarajan – Financial Markets and Services – Himalaya Publishing House
2. Clifford Gomez – Financial Markets, Institutions and Financial Services – PHI

References:

1. Punithavathy Pandian – Financial Services and Markets – Vikas Publishing House
2. Bharati V Pathak – The Indian Financial System: Markets, Institutions and Services –
3. S. Batra – Financial Services and Markets – Deep and Deep Publication.