IPO GMP shows us the premium that someone is willing to pay for the corresponding IPO in the grey market; it is frequently used to forecast the listing price of upcoming IPOs.


Frequently Asked Questions

In an Indian initial public offering, a grey market occurs when the broker-dealer sells the shares to the buyer for more money than the SEBI-set price.

Grey market premiums are primarily used to gain early access to the hottest new issues before average investors can purchase them.

The Kostak rate is the sum that an investor receives when they sell their IPO application on the black market. No matter how the IPO allotment status changes, this is the amount an investor will receive.

‘Subject to’ is another term frequently used in the grey market to denote a sauda for buying a firm allotment application. In other words, this is the amount buyers are ready to pay for an application that has been allotted shares.

Based on the company's performance, its demand in the grey market, and the likelihood that someone will subscribe, a calculation is made. Assume that the A IPO price, which is set at 300, could list at 325 (i.e., 300 + 25) if the grey market is showing a rate of 25. This is just a guess, though, so the listing's actual price might be different from the black market price.