The primary market refers to the part of the capital market where new countries, stocks and bonds are created, issued and sold to the public. These securities are sold by issuers, i.e. the companies, government and other entities looking to raise funds. It does so by directly offering the newly issued securities to the public, which allows the issuer to sell securities to the public in a cost-efficient manner and enables investors to purchase them at more reasonable prices.

The primary market can take many forms, such as an Initial Public Offering (IPO), a private placement, a rights issue, or a preferred allotment. In an IPO, a company offering its shares to the public for the first time will generally list its shares on a major stock exchange. This allows the company to raise capital for its operations at a price determined by the market.

For private placements, the issuer does not have to register with a stock exchange in order to offer securities but rather sells the newly issued securities directly to one or more large investors, such as mutual funds, pension funds or wealthy individuals.

Rights issues involve the selling of additional shares in a company that is already listed. These shares are distributed to existing shareholders, who can decide whether or not to purchase the new shares. The price of the shares is generally determined by the market.

Preferred shares are like debt securities, in that they pay a fixed rate of interest and are not affected by increases or decreases in the market price of the underlying shares. Preferred allotment involves the issuing of such shares at a fixed price, before they are offered to the public in the secondary market.

The primary market plays an important role in today's economy, as it allows companies and governments to raise the capital they need to expand their businesses and provide services. At the same time, it offers investors the opportunity to purchase newly issued securities directly from the issuer, rather than buying them in the secondary market. In this way, the primary market provides investors with a more efficient and cost-effective way of making investments.