What is the difference between a primary offering and a secondary offering in the stock market?

What is the difference between a primary offering and a secondary offering in the stock market Introduction: The Significance of Offerings in the Stock Market Hello everyone, and welcome to our video on primary and secondary offerings in the stock market. When a company decides to raise capital, it often turns to the stock market. And this is where primary and secondary offerings come into play. While both involve the sale of shares, their purposes and mechanisms differ significantly. Let's delve deeper into these distinctions. Primary Offering: Laying the Foundation A primary offering, also known as an initial public offering (IPO), occurs when a company offers its shares to the public for the first time. It's a significant milestone in a company's journey, as it transitions from being privately owned to publicly traded. The primary goal of an IPO is to raise capital, which can be utilized for various purposes such as expansion, research, or debt repayment. By going public, a company not only gains access to a vast pool of potential investors but also enhances its brand visibility and credibility in the market. The IPO Process: From Filing to Listing The journey from filing for an IPO to getting listed on a stock exchange involves several stages. First, the company engages an investment bank or underwriter to manage the offering.