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Advantage and Disadvantage of Investing in Primary market

Updated: Category: General
Author: Member Level: GoldPoints: 10

Pros and Cons of share holders who invest in primary market

Positive feedbacks:

Investing in the primary market has its own benefits , some of key benefits are
1. company successfully raised funds
2.manipulation of price is smaller so invest in primary market is safer
3.No need of paying any brokerage or transaction fees or any tax such as service tax, stamp duty and STT
4.No need to time the market the investors get the share at the same price.

Negative feedbacks:

1. Over subscription ,the shares are alloted in proportionate basis, small investors hardly get any allotment
2. money is locked and shares are alloted in after a few days. whereas in case of secondary market the shares are credited within three working days.

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