The IPO Grey Market is an unofficial, over-the-counter market where investors trade IPO applications or shares before they are officially listed on stock exchanges like NSE or BSE.
What is Grey Market Premium (GMP)?
Grey Market Premium (GMP) represents the additional price over and above the IPO offer price that buyers are willing to pay for the shares in the unofficial market. For example, if an IPO has a price band of ₹100 and its GMP is ₹30, the expected listing price is ₹130 (+30%).
What are Kostak and Subject to Sauda Rates?
- Kostak Rate: The fixed profit an investor gets by selling their entire IPO application to a buyer regardless of allotment.
- Subject to Sauda (SS): A deal where the buyer pays the profit only if the seller actually receives an allotment in the IPO.
Important Disclaimer
Grey market trading is unregulated by SEBI. GMP figures should be used merely as sentiment indicators rather than guaranteed return metrics.