Capital market is a market wherever purchasers and dealers take part in exchange of budgetary securities like bonds, stocks, and so forth. It facilitates channelization of excess funds from investors to establishments, which then invest them into profit-making use. Usually, this market deals largely in long duration securities. Capital markets are made of primary markets as well as secondary markets. Primary markets affect trade of recent problems with stocks and alternative securities, while the secondary market copes with the interchange of prevailing or earlier-issued securities. Alternative necessary division within the capital market is formed on the idea of the character of security listed, which are stock exchange and bond market. Capital markets are essential for the functioning of financial system, as capital may be an essential element for making monetary output. These markets embody primary markets, wherever new stock and bond problems are put on sale for the stockholders, and secondary markets, that deal in current securities.