Understanding IPO GMP: A Beginner’s Guide

When talking about new stock offerings, the term “IPO GMP” frequently comes up in the world of investing. If you’re new to investing, IPO GMP may seem like a complicated idea, but when you break it down, it’s pretty simple. We’ll go through the definition of IPO GMP, its significance, and its effects on investors in this guide.

Latest IPO GMP Today

IPO NameDateTypeIPOGMPIPOPriceGainKostakSubject
Indegene6-8 MayMainline₹260₹45258%₹-₹-
Aadhar Housing Finance8-10 MayMainline₹55₹31517%₹–₹–
TBO TEK8-10 MayMainline₹520₹92057%₹-₹-
Amkay Products30-3 MayBSE SME₹55₹55100%₹-₹80,000
Racks & Rollers30-3 MayBSE SME₹50₹7864%₹-₹60,000
Sai Swami Metals30-3 MayBSE SME₹50₹6083%₹-₹70,000
Slone Infosystems3-7 MayNSE SME₹65₹7982%₹-₹60,000
Refractory Shapes6-9 MayNSE SME₹10₹3132%₹–₹30,000
Winsol Engineers6-9 MayNSE SME₹125₹75167%₹–₹150,000
Find listings Technologies7-9 MayBSE SME₹20₹12316%₹–₹10,000
Silkflex Polymers7-10 MayNSE SME₹5₹5210%₹–₹7,000
TGIF Agribusiness8-10 MayBSE SME₹–₹93-%₹–₹–
Energy Mission9-13 MayNSE SME₹55₹13840%₹–₹40,000
Aztec Fluids10-14 MayBSE SME₹–₹67-%₹–₹–
Premier Roadlines10-14 MayNSE SME₹–₹67-%₹–₹–
ABS Marine Services10-15 MayNSE SME₹–₹147-%₹–₹–
Indian Emulsifier13-16 MayNSE SME₹–₹132-%₹–₹–

What is IPO GMP?

The difference between the IPO’s issue price and its trading price on the grey market is known as the IPO GMP or IPO Grey Market Premium. There is a period during which unofficial trading of the IPO shares occurs in the grey market before the IPO officially being listed on stock exchanges for public trading. The buying and selling of shares occurs in the “grey market,” an over-the-counter market, without the stock exchanges getting involved.

The difference between the price at which shares of an Initial Public Offering (IPO) are traded on the grey market and the issue price determined by the company is known as the IPO grey market premium or IPO GMP. Before shares are listed on a stock exchange, they can be purchased and sold on the unofficial “grey” market. GMP is a useful metric for assessing investor opinion of an IPO. When a company has a high GMP, it indicates that investors are optimistic about it and anticipate that when it goes public, the share price will increase. When a company has a low GMP, it means that investors are pessimistic about it and believe the share price will drop when it lists.

It is noteworthy that the GMP may not consistently serve as a reliable indicator of the performance of the share price following the IPO’s listing on the stock exchange. The amount of demand from institutional investors, as well as general market conditions, are just two of the many factors that can influence the share price after listing. The GMP only represents the mood of investors at a given moment in time. The actual performance of the shares will be influenced by the company’s performance, general market conditions, and other factors. The IPO Grey Market Premium (GMP) is an important factor in attracting prospective investors. 

What is IPO Grey Market Premium?

The Grey Market Premium, or GMP, is the difference between the price at which IPO shares are traded on the grey market and the price at which they were issued. For example, assume an investor is willing to pay an additional Rs 300 for an IPO share, even though the IPO issue price is Rs 850. As a result, the GMP for the initial public offering is Rs 300 per share.

Listing price prediction is aided by IPO GMP. Investors expect a listing price of Rs 1,150 (IPO issue price plus GMP, or 850 + 300) in the example above. The GMP is one of the most significant indicators that typically aid investors in predicting the IPO price and making an investment decision on it, even though there is no guarantee that the IPO listing price will precisely match the GMP.

Important Points to Consider about IPO GMP:

  • Stockbrokers and IPO investors are involved in the informal transactions that take place on the grey market. It’s contingent upon mutual trust between the two sides.
  • Before submitting an IPO application, read our analysis.
  • The rates for the grey market are determined and obtained from experts or market research.
  • Since trading on the grey market is prohibited, we do not advise doing so.
  • The premium received by selling an IPO application to a third party in an off-market transaction before the issue is allocated or listed is known as the Kostak Rate.

What Factors are Influencing IPO GMP?

Company Fundamentals: A solid management team, growth potential, and strong financials can all have a positive effect on the GMP.

Market Conditions: Investor interest in initial public offerings (IPOs) is influenced by economic factors, sector performance, and overall market sentiment.

Demand and Supply Dynamics: The GMP is largely determined by the quantity of shares that are available and the degree of investor interest.


Q1. How is the Grey Market Premium Calculated?

A. Before the IPO listing procedure, a price known as the IPO GMP, also known as the grey market premium, is traded on the grey market. The computation is carried out by taking into account the likelihood of the subscription, the company’s performance, and its demand in the gray market. Assume that the IPO for X may list at ₹300 (i.e., ₹200+₹100) if the IPO price is fixed at ₹200 and the grey market is displaying a rate of ₹100. This is merely an assumption, so the real listing price may differ from the price on the black market.

Q2. Can You Trust Grey Market Stocks?

A. The trader or broker decides whether or not to ensure security. When trading on the grey market, taking a chance is considered necessary. Caution should be exercised because there may be greater-than-expected fluctuations. Simply follow our recommendation and apply the IPO GMP for listing gain. Trading in the primary market should be done cautiously and only after it has been listed.

Q3. What is the Grey Market IPO Application Buying/Selling Process?

A. There are no recognized connections between the grey market and any individuals or businesses. The IPO GMP states that certain brokers buy and sell IPO applications at Kostak Rates or Subject to Sauda Rates. It is recommended to look for local brokers who trade IPO applications on the grey market and act as a liaison between buyers and sellers. Proceed with the purchase or sale once you understand the prices.

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