IPO Grey Market Premium or IPO GMP is a very important metric which every individual should check before subscribing to an upcoming IPO.

Although GMP is an unofficial way of predicting the listing price of an IPO but it is an effective tool for any IPO investor who wish to subscribe to an IPO.


What is IPO Grey Market Premium?

IPO Grey Market PremiumIPO Grey Market Premium is price decided in the Grey Market between buyers & sellers of the IPO even before the IPO application or shares are available in the exchange for trading.

Grey Market Price or Grey Market Premium helps in a great way to the IPO investors to whether subscribe to the IPO or not.

Premium is decided on the simple formula of demand & supply. If the demand is high & supply is low then the premium is high & if the demand is less & supply is abundant then the premium is low.

This entire process happens in an unofficial way, so there is no guarantee that the GMP is giving perfect indication of the listing price.

Although, Routine Investors understands that Grey Market Premium is a very good indicator of whether the IPO will perform or not. Hence, it is a very important tool to check before subscribing to any IPO.


List of Recent IPOs with their GMP or Grey Market Premium

IPO NameIssue Price (Rs)GMP

(Rs)

Kostak

(Rs)

SS

(Rs)

Listing Price (Rs)Profit/Loss – Per Share
Heranba IPOUpcoming
Railtel IPOUpcoming30-40Rs.400Rs.4500NA
Nureca IPORsRs.NANA
Stove Kraft IPO385 90-100NA49831.62
Home First Finance IPO518145-1504503000612.156.34
Indigo Paints IPO1490 870-88095085002607.575.16
IRFC IPO26 0.50-0.80350NA25-2.5
Antony Waste IPO315 60-6520040004300.22
Mrs Bector Food IPO288 210-220350NA50135.83
Gland Pharma IPO1500150-1608001400171045.96
Equitas Small Finance Bank IPO332-310003141.67
UTI AMC IPO5545-103004900.251.98
Mazagon Dock IPO145 35-40350800216.2554.79
Burger King IPO59 – 60 130-14050010000NA

(Data as on 16-03-2020)

Recent IPO Performance

DateIPO NameIssue Size (in Rs. crores)Issue

(Rs.)

Listing Open

(Rs.)

Listing Close

(Rs.)

Listing Gains(%)CMP

(Rs.)

Current Gains (%)
05-02-2021Stove Kraft IPO412.63385498445.9515.83506.7531.62
03-02-2021Home First IPO1153.72518612.15527.41.81550.856.34
02-02-2021Indigo Paints IPO1170.5614902607.53118.65109.312,609.9575.16
29-01-2021IRFC IPO4633262524.85-4.4225.35-2.5
01-01-2021Antony Waste IPO300.53315430407.2529.29315.70.22
24-12-2020Bectors Food IPO540.54288501595.55106.79391.235.83
14-12-2020Burger King IPO796.560115.35138.4130.67149.5149.17
20-11-2020Gland IPO6479.55150017101820.4521.362,189.3545.96
02-11-2020Equitas Bank IPO517.6333132.75-0.7646.7541.67
12-10-2020UTI AMC IPO2159.885544900.25476.6-13.97564.951.98
12-10-2020Mazagon Dock IPO443.69145216.2517319.31224.4554.79
05-10-2020Angel Broking IPO600306275275.85-9.85343.212.16
01-10-2020Chemcon Special IPO318340731584.872450.1532.4
01-10-2020CAMS IPO2244.33123015351401.613.951,927.0556.67
21-09-2020Route IPO600350708651.186.031,594.00355.43
17-09-2020Happiest Minds IPO702.02166351371123.49398.4140
23-07-2020Rossari IPO496.25425670742.3574.67912.5114.71
16-03-2020SBI Cards IPO10286.2755658683.2-9.511,020.6535.19
30-12-2019Prince Pipes IPO500178160166.6-6.4407.3128.82
12-12-2019Ujjivan Small IPO7503758.7555.951.0835.4-4.32
04-12-2019CSB Bank IPO409.68195275300.153.9221.2513.46
14-10-2019IRCTC IPO635.04320644728.6127.691,729.20440.38
20-08-2019Sterling & Wilson IPO3125780700725.35-7.01254.3-67.4
04-07-2019Indiamart IPO474.1297311801302.5533.879,211.65846.73
08-05-2019Neogen IPO131.480251263.550757.65NA
15-04-2019Metropolis IPO1200.18880960959.559.042,042.95132.15
11-04-2019Rail Vikas IPO430.88191919.050.2632.571.05
01-04-2019Embassy Office IPO4750300300314.14.7350.2516.75

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    Disclaimer – 

    • IPO Grey Market Premium (IPO GMP) mention is valid for the specific date only.
    • Top10stockbroker.com is not buying and selling IPO forms on IPO Grey Market.
    • Do not subscribe for IPO by just seeing premium Price as it may change anytime before listing.

    Grey Market FAQs

    Ques – What is grey market?

    Answer – Grey market basically refers to a trade of a commodity or shares through distribution channels which are not authorized by the actual/original manufacturer. However, this situation isn’t limited to goods only. Shares are also sold out before getting listed on the indexes before IPO.

    Ques – What is grey market premium price?

    Answer – Grey Market Premium price also known as GMP price is the premium amount at which the grey market IPO shares or stocks are traded before getting listed on the stock exchange like BSE. In other words, the company’s stocks get sold outside the stock market at a particular price.

    Ques – How do I apply for IPO in GREY market?

    Answer – Grey market is an over-the-counter market, hence, there’s no need for official people or further authorization or stamp. You need to find a local dealer and now you can sell your application to an interested buyer. These local dealers are highly found in cities like Mumbai, Delhi, Jaipur etc.

    Ques – How do I buy unlisted shares?

    Answer – Unlisted shares can be purchased through many dealers in the market, through specific contacts in the market. There are many dealers who deal with stocks, however, these stocks come with liquidity risks and they may not get listed on the exchange ever.

    Ques – What is Kostak Price?

    Answer – To apply for an IPO, there is an application price or application charges that come along and is known as Kostak price. It is actually the premium amount at which IPO applications are being traded for in the grey market.

    Ques – Is GREY market buy or sell shares illegal?

    Answer – Grey Market is basically a trading that takes place before the stock of a company gets enlisted on the stock exchange. It takes place before the IPO release and the prices may change any time. Hence, it is an unofficial trading and hence, not “illegal”.

    Ques – How to sell shares on the GREY market?

    Answer – To sell shares in the GREY market, you need to find a local dealer first. Grey Market doesn’t have a regulatory body and hence, any person interested in selling the shares can choose their own buyers/sellers on a personal basis and sell the shares according to their prices.

    Ques – What is Subject to Sauda (SS) in GREY market?

    Answer – Subject to Sauda also known as Subject to allotment, is a kind of deal in the Indian Stock market. Basically, an investor can unofficially sell an IPO application at an agreed price to the buyer. Here both the buyer and seller agree that deal is only valid if the seller will get the allotment otherwise the deal will get cancelled.

    Ques – What is Kostak and Subject to Sauda?

    Answer – Kostak is the price of application. It is basically a premium amount in rupees at which IPO applications are traded in IPO Grey Market. Whereas, the Subject to Sauda is a kind of deal which is decided by both buyer and seller on firm allotment on the IPO Application. If one buys or sells the IPO application on the subject to sauda it simply means that one can get the said amount if one will get the allotment otherwise sauda will be cancelled.

    Ques – How to determine IPO listing prices?

    Answer – Here’s a simple maths to determine the IPO listing prices. Simply divide the number of shares sold by the amount of the paid-in capital to get the value of one share of stock. Although, listing price of the IPO is decided by the syndicate of the investment banks. It is done by performance of the IPO through a process called book building.

    Ques – Is there any holding period in IPO?

    Answer – Yes, there is a holding period which is known as the IPO Lock-up period. It is a contract provision that prevents insiders, who already have shares, from selling them for a certain amount of time after the IPO. A standard/general IPO holding period typically ranges from 90 to 180 days, while for SPAC IPOs normally last for a duration of 180 days to one year.

    Ques – Can I buy pre-IPO shares in India?

    Answer – Yes, you can buy the pre-IPO shares as many times as you want before the IPO release in India. But, keep in mind, once the shares get listed, they will be in a holding period for 1 year.

    Ques – When can unlisted company issue IPO?

    Answer – Unlisted companies can issue an IPO. They can enter the public market by initial public offerings (IPOs) by a draft prospectus that has been filed with the Board, through an eligible Merchant Banker. This has to be done least 21 days prior to the filing of Prospectus with the Registrar of Companies (ROCs).

    Ques – Can you sell an IPO immediately?

    Answer – No, you can’t sell an IPO immediately as they have a one-year of locking period, however; if the listing price is equal or higher than the price you order to sell in pre-open; shares can be sold out at the listing price.

    Ques – Can unlisted shares be Dematerialised?

    Answer – Yes, shares of an unlisted company, under the Indian Law, could hither to either be held in physical form or in dematerialised form.

    Ques – What happens if a stock becomes Zero?

    Answer – If a stock becomes Zero, then this simply means that the equity value or the market cap of a particular company is zero. Now the stock will get delisted from the stock exchange, as it will have a zero-market value.


     

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