Answer the Question based on following case study.

Mr. Raj is working as finance Manager is Amaira Company. Company has a capital Base of ₹50 lacs of Equity shares of ₹100 each. Now Company wants to enter into a new project for which it requires capital of ₹40 lacs. There are two options available to him.First to invite subscription from public through issue of prospectus and second to go for long term borrowing by issuing debentures. But Issue of debentures will not be suitable as the rate of return of company is less than Interest Rate of debentures. So the final decision was to issue Equity shares.

Under which market securities are sold by the company to the investors directly ?

Primary Market

The correct answer is option (2) : Primary Market

Securities are sold by the company to the investors directly in the 02. Primary Market." The primary market is where companies issue new securities (such as stocks and bonds) to raise capital, and investors can purchase these newly issued securities directly from the issuing company. It is the market for the initial sale of securities to the public.