Equity Capital Markets

Equity Capital Markets (ECM) are financial markets where companies raise capital through the issuance of stocks, including initial public offerings (IPOs), secondary offerings, and private placements. ECM activities involve investment banks, brokers, and financial advisors who help companies structure and market their equity offerings to investors. The primary purpose of ECM is to provide companies with access to capital for growth, acquisitions, and other strategic initiatives, while offering investors opportunities to buy shares and participate in the company’s potential success. Equity capital markets play a significant role in the financial ecosystem, providing liquidity and facilitating the flow of capital between companies and investors.

Example

A tech company raises funds through an IPO in the equity capital markets, offering shares to the public for the first time to finance its expansion.