IPO GMP - Grey Market Premium | Latest IPO GMP, Kostak Rates & Sauda Prices

The IPO Grey Market Premium ( IPO GMP ) is a term people use in the IPO market. It means the stock of the company that came up with the IPO bought and sold outside the stock market. Grey market premium is nothing but the price at which the shares are being traded in the grey market. An IPO grey market is one where a company’s shares are bid and offered by traders unofficially. This takes place before the shares are even issued by the company in an Initial Public Offering (IPO). Since this is an unofficial market, there are no rules and regulations. Market regulators like the Securities and Exchange Board of India (SEBI) are not involved in these transactions. The regulator doesn’t endorse this either.

Rolex Rings IPO GMPGlenmark Life Sciences IPO GMP,  is started now. As per the current GMP and Sauda Price, it looks like IPO will list at a higher price than the issue price. Check out current IPO GMP Live with daily updates.

Live IPO (GMP) Grey Market Premium Today

IPO Name GMP Today Kostak SS
28 -30 July
Rs460 Rs.400 Rs.5000
27 -29 July
Rs150 Rs.200 Rs.2000
16 -20 July
Rs.720 Rs.300 Rs.7000
14 -16 July
Rs.11 Rs.450 Rs.1150
07 -09 July
Rs.550 Rs.1050 Rs.7000
07 -09 July
Rs.515 Rs.650Rs.6000
23 -25 June
Rs.50 Rs.250 Rs.2500
16 -18 June
Rs.40 Rs.0 Rs.0
16 -18 June
Rs.140 Rs.250 Rs.0
14 -16 June
Rs.135 Rs.0 Rs.0
Sona Comstar IPO
14-16 June
Rs.10 Rs.0 Rs.0
Paras Defence And Space Rs.0 Rs.0 Rs.0
Zomato IPO Rs.0 Rs.0 Rs.0
07-09 Apr
Rs 25-30 Rs.0 Rs.0

Note for the Investors:

  1. IPO Grey Market Premium (IPO GMP) mention is valid for the specific date as mentioned in the header.
  2. We are not buying and selling IPO forms on IPO Grey Market.
  3. Kostak Rate is the premium one gets by selling his/her IPO application (in an off-market transaction) to someone else even before allotment or listing of the issue.
  4. Do not subscribe for IPO by just seeing premium Price as it may change anytime before listing. Subscribe only considering Fundamental of the companies

Grey Market Premium

Grey market premium is nothing but the price at which the shares are being traded in the grey market.

For instance, let’s assume the issue price for stock X is Rs 400.

If the grey market premium is Rs 600, it means that people are ready to buy the shares of company X for Rs 1000; (i.e. 400+600).

This is how a typical deal works out in the grey market.

Let’s understand this with another example. Karan is a trader in the stock market. He is allocated 200 shares at a certain issue price in an upcoming IPO.

Meanwhile, there are other investors, called ‘buyers’, who think that the value of the share is much higher than its issue price.

These buyers are ready to pay a ‘premium’ on the shares in the grey market. Dealers in the grey market contact investors like Karan, called ‘sellers’. They decide to make a deal to sell the shares at a certain price (premium) that is higher than the issue price.

If Karan likes the deal and he is unwilling to take a risk with the stock’s listing, he sells his shares and books the profit.

IPO Grey Market AKA GMP FAQs:

What is Grey Market Premium aka GMP?

The "grey market premium" aka "IPO GMP" is a term people use in the IPO market to check what is the estimated price the IPO might list on. The grey market is unofficial but investors looking at the grey market price of an IPO to get the fixed gain of the stock. The grey market works before the IPO listing and during the days from the IPO start date to the allotment date. The grey market premium indicates how the IPO might react on a listing day with an estimated price. Let's see how the calculation goes on. If the company comes up with an IPO of ₹200 and the grey market premium is around ₹50 then we can assume that the IPO might list around ₹250 on its listing day. But the fact is, there is no reliability. In most cases, IPO GMP works but in some cases, it's not. We have observed that if the IPO is in demand and the estimated HNI and QIB subscription is on a higher side, the IPO list around the given price with estimated IPO GMP.

What are Kostak Rates?

The Kostak rate is the amount that one investor pays to the seller of an IPO application before the IPO listing. As the grey market reacts the Kostak rates also react that way. One can buy and sell their full IPO application on Kostak rates outside the market and fix their profit. The Kostak rates apply the investor gets the IPO allotment or not, the buyer should pay the Kostak rates for the IPO. If one did 10 applications for one IPO and sold the same at ₹2000 per application it means he or she secured the IPO profit at ₹20000 rupees. If he gets the allotment in 2 applications still his profit will be ₹20000. Now if he sells the stock and gets a profit of around ₹40000 then he or she needs to give the remaining profit of ₹20000 to the investor who bought the application. This is the secure way to sell your application in the IPO grey market.

What is Subject to Sauda?

As per the Kostak rate, the Subject to Sauda on the application is the amount decided when the investors get the firm allotment on their IPO Application. If one buys or sells the IPO application on the subject to sauda it means one can get the said amount if one will get the allotment otherwise sauda will be canceled. In this one can not fix their profit as it depends on the allotment. Again if one gets an allotment and he or she sold the application around ₹10000 and the profit goes high on listing day around ₹20000 then one should pay ₹10000 to the guy who bought the application.

How to Calculate Grey Market Premium?

The IPO GMP aka grey market premium is a price that is traded in the grey market before the IPO listing process. The calculation is done based on the company's performance, its demand in the grey market, and the probability of the subscription. Let's assume that if the X IPO price is fixed at ₹400 and the grey market is showing the rate of ₹200 it means the IPO might list at ₹600 (ie: ₹400+₹200). Still, this is an assumption but the actual listing might vary from the grey market price.

Are Grey Market Stocks Safe?

It depends on the broker or the trading person and We suggest it is not safe. If you are trading in the grey market it will be at your own risk. There might be fluctuations on a higher side so one needs to do it with precautions. As we suggest just refer to the IPO GMP for the listing gain purpose. Be wise and trade in the primary market after listing only.

How Do I Buy / Sell IPO Application in Grey Market?

There are no official people or businesses associated with the grey market. Some brokers buy and sell IPO applications on Kostak Rates or Subject to Sauda Rates based on the IPO GMP. One should find local brokers who stay between buyers and sellers and do the grey market trading of IPO applications. Be aware of the rates and then do the buying or selling.

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