In this blog post we will try to understand why stock market exist and how it function. Any company needs capital to start with. This capital can come from initial investors or banks. When company starts functioning, at some point of time company may have expansion plan and addition fund is required for the same. In some of the cases initial investors want to sell their stake in the company and want to make some profit. In both the cases, company may decide to list in the stock exchange and sell some part of stake of the company as equity to other investors to raise some funds. Stock exchange gives an opportunity to companies to list them in exchange through IPO (Initial Public Offering) and raise funds from other investors who are interested to invest in the company. IPO of the company is issued through primary market to its first time investors publicly. Once, IPO of the company gets listed in stock exchange, it can be traded between buyer and seller in secondary market through stock...