IPO Grey Market Premium: Upcoming Latest IPO GMP LIVE DATA & Kostak Rates

IPO Grey Market Premium & Rates, Upcoming IPO GMP Detailed Guide

Hello Viewers,

You guys are already well-versed in What is IPO? If you have been investing in IPO for quite some time. You might have heard quite often that the Upcoming IPO is quoting at a grey market premium or a grey market discount.

Our today’s post is centered around the IPO grey market.

“LATEST IPO GREY MARKET PRICE (GMP) & UPCOMING PREMIUM & KOSTAK RATES”

You must be wondering what is the grey market for IPO? or what the grey market means. All your desired queries will be sorted through this post.

The grey market of IPO is also referred to as IPO grey market. Stay tuned with us till the end to learn about Grey market IPO & Grey market premium of IPO.

So without any further adieu let’s get started!

What is the Grey Market?

Grey Market is an unregulated market to trade IPO applications and IPO shares before the listing of the stock. An investor may not want to trade in the grey market, but getting an idea of the GMP can be used to estimate the listing gain on the IPO share. GMP or Grey Market Premium adding to the issue price gives the estimated listing price of the IPO share.

Here we are reporting the GMP of all upcoming and current SME and Mainboard IPOs along with Subject 2 Sauda price. Estimated Listing Price is also calculated by adding up GMP and IPO cap prices.

**The GMP prices shown here are only news related to the grey market. We do not trade/deal in grey market or subject to rates (sub2), nor do we recommend trading in grey market.

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Latest Grey Market Premium Today

(As On 2024)
Here are the latest IPO grey market premium rates.
Latest IPO GMP Live Mainline / IPO Grey Market Premium

IPO Company IPO Date Price Band Lot Size GMP Listing Gain
Mukka Proteins FEB 162 – 171 0 ₹15 %
Bharat Highways InvIT IPO 28 – 01 MAR 98 – 100 150 %
Platinum Industries 27 – 29 FEB 162 – 171 87 ₹90 53%
Exicom Tele Systems 27 – 29 FEB 135 – 142 100 ₹130 92%
GPT Healthcare 22 – 26 FEB 177 – 186 80 ₹15 8%
Juniper Hotels IPO 21 – 23 FEB 342 – 360 40 1%
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Here we are reporting the GMP of all upcoming and current SME IPOs along with Subject 2 Sauda price. Estimated Listing Price is also calculated by adding up GMP and IPO cap prices.

SME IPO Grey Market Premium Live

IPO Company IPO Date Price GMP Listing Gain
M.V.K. Agro Food 29 – 04 MAR  120 %
Purv Flexipack 27 – 29 FEB  71 ₹125 176%
Owais Metal and 26 – 28 FEB  87 ₹17  20%
Sadhav Shipping 23 – 27 FEB  95 ₹14  15%
Zenith Drugs 19 – 22 FEB  79 ₹40  51%
Deem Roll Tech 20 – 22 FEB  129 ₹88  68%

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Here are some FAQs on the IPO grey market.

So let’s take a read

What is Grey Market Premium (GMP)?

Grey Market Premium is easy to understand. It is the premium amount at which shares and applications are bought and sold before they are available on the stock exchange.

The IPO market is streaming at a high today. The NSE and BSE IPO grey market premium has a significant role in determining the subscription.

Grey Market Premiums are also attached with the words ‘Buyer’ or ‘Seller’. They tell the price either at which buyers are willing to buy shares or the price at which sellers are willing to sell their IPO shares.

Dear Friends the grey market premium is an over-the-counter or unofficial market. Here the new shares or the shares of the company bringing the IPO are bought and sold even before their listing on any of the exchanges.

The grey market assists in the price discovery of the stock.

The premium can be positive and negative depending on the demand and supply of shares. If the premium is high, more investors will apply for an IPO. On the other hand, if the premium is low or negative, fewer investors will apply for the IPO.

These are not actual shares of the IPO But something like unofficial towards the IPO.

So, let us understand this with the help of an example

Example of Grey Market Premium

Here, we will take two different situations.

  • Suppose the issue price of Reliance Nippon is Rs.250. The grey market premium of Reliance Nippon is Rs.50. In the given situation, the premium is positive. Because of a positive premium, the buyers are ready to purchase the shares of Reliance Nippon at Rs. 250 + Rs. 50 = Rs. 300
  • Suppose, in this situation, the grey market premium of Reliance Nippon is Rs. -20. The issue price is Rs. 250.  Since the grey market premium here is negative, it means that the sellers are ready to sell the shares at a discount of Rs. 20 i.e. Rs. 250 – Rs. 20 = Rs. 230
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The fluctuation in the premium keeps on happening. Until the shares are listed for trading on the exchange, action in the grey market premium price continues. In addition, an investor can also take the delivery of shares by purchasing the shares of the IPO company on a listing day.

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Disclaimer:

– IPO Grey Market Premium (IPO GMP) mention is valid for the specific date as mentioned in the header.
– We are not buying and selling IPO forms on IPO Grey Market.
– 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.
– Do not subscribe for IPO by just seeing the premium Price as it may change time before listing. Subscribe only considering the fundamentals of the companies.
– This is only coverage of News related to Grey Market. We don’t deal in Grey market premium, nor do we recommend dealing in Grey Market. Investment decisions based on Grey Market trends can be faulty.

What is Kostak?

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.

Is the Grey market a part of the IPO market?

The grey market is unofficial whereas on the other hand IPO is the authorized and recognized medium of raising funds in the market within the SEBI guidelines.

So the IPO market and the IPO grey market do not have any official relationship. You must be well known regarding what is IPO but it is also very important to know about the grey market in IPO.

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Why do IPOs trade in the grey market before listing?

Firstly, I would like to tell you that the grey market is not an official platform where interested traders can bid and offer shares of the forthcoming IPO.

What are Kostak rates?

A kostak rate is the amount in which one pays for the IPO before the IPO is listed on the stock market.

It is a premium one gets by selling the IPO in the grey market.

It is a colloquial word for the prices of an application before the actual issue or the allotment.

The minor difference between Kostak and GMP.

What is Subject to Sauda?

If someone buys an IPO on the subject to sauda price this means they will get the said amount In this one cannot fix their profit as it depends on the allotment. Again if one gets an allotment and he or she sells the application for around Rs.10000 and the profit goes high on listing day around Rs.15000 then one should pay Rs.5000 to the guy who bought the application.

In simpler words, it is a kind of deal in the IPO grey market in India. Unofficially, an investor can sell an IPO Application to a buyer at an agreed price (Kostak Rate) before IPO Shares are listed in the stock market. If the seller gets an allotment, he will get Rs 5000.

Who are the interested parties in the grey market?

  • Retail Investors– The grey market is indicative of the post-listing performance
  • HNI investors– It gives them an idea regarding the appetite for the stocks
  • IPO financiers– The grey market provides them with an idea regarding whether the financing in IPO is a lucrative business proposal.
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Does SBI regulate the grey market?

As stated above, the Grey market is not an official platform that operates outside the ambit of the SEBI regulation.

Any trade, transaction, or bid done under the grey market is not authorized or approved by the regulator or any of the stock exchanges.

How can investors make the best of the grey market?

The grey market is an unofficial trading platform that operates outside the purviews of the SEBI regulation.

Hence all transactions are in the form of the forward transaction and are exposed to the counterparty risks and uncertainty.

At best, one can consider the grey market price as an indicator of the listing price. It is advised that do not take the (GMP) grey market too seriously, as such a grey market is subject to manipulation.

Important points about IPO grey market and IPO GMP 

  • IPO grey market premium movements may change very quickly and rates may be volatile. It is risky to base an investment decision on gray market IPO rates. Please refer to our 
  • IPO grey market premium rates are provided as sourced from market intelligence. Please note these IPO GMP rates may be different depending on geographies and markets.
  • We don’t trade into the grey market nor do we facilitate buying or selling of IPO forms. 
  • IPO GMP is the rate of premium an IPO commands per share in the grey market.
  • Kostak rate is the amount an investor gets by selling his/her IPO application in the grey market. This is the amount an investor stands to gain, irrespective of allotment status.
Note for the Investors
  • Do not subscribe to the IPO just by looking at the premium price as it is subject to change anytime before getting listed
  • The grey market does not sponsor the buying and selling of IPO forms
  • IPO the grey market premium is valid for the specific date as mentioned in the header
  • kostak rates are the premium one gets by selling his her IPO application to someone else before allotment or listing.

A gray market transaction involves the unofficial agreement between the IPO investor and a stockbroker which permits an investor to lock profits before the stock lists.

Under this system shares allotted to the IPO, an application is sold by the broker without transferring the shares into their account.

Since it is an unwritten accord between the two parties, it solely depends upon the trust between the broker and the investor.

Frequently Asked Question

So, let us answer a few FAQs regarding ” IPO Grey Market Premium”

Q Who decides the IPO grey market price

Just like the stock market and the commodity market trading, IPO grey market premium is decided based on demand and supply.

If there are more buyers than sellers the prices go up and vice versa.

It is to be noted that there are no regulatory bodies included in the grey market trading and therefore, there is no restriction on price momentum.

It may rise or fall suddenly.

Q How does the grey market work?

Option 1 Trading IPO Allocated shares in the grey market

  • Investor applies for shares through an IPO. There is financial risk involved with these as they may not get any allocated share or they may receive the shares that may list below the issue price.
  • few other people in the market believe that share value is more than the issue price.
  • Buyers contact the grey market dealers and place the order to buy the IPO share at a certain premium
  • The grey market dealers contact the seller and ask them whether they are interested in selling their IPO shares
  • the grey market dealer gets the application details from the seller and sends the notification to the buyer that he bought a certain premium at this time
  • the allotment is done and the seller may or may not receive an allotment of shares
  • If shares are allocated to the sold application, the seller may get a call from the dealer to sell them at a certain price or to transfer allocated shares to some Demat account.
  • In the case of selling the shares, the settlement is done based on the profit or loss.
  • If no shares are allocated to the sellers the deal is over without any settlement. The seller still gets his premium as he sold his application.
  • Option 2: Kostak – Trading IPO Applications in Grey Market:
    • Investor applies for the shares through an IPO. They take a financial risk as there is the likelihood that they may not get allocated any share or they receive the shares but shares may list below the issue price. Let’s call them ‘Sellers’.
    • Few other people in the market think that the share value is more than its issue price. They start collecting these shares through grey market dealers much before the shares are even allocated. Let’s call them ‘Buyers’.
    • Buyers decide the price of the application based on various assumptions and market conditions. They give an offer to the sellers that they are willing to buy an IPO Application (without knowing how many shares will get allocated) at a certain premium.
    • To avoid the risk of allocation sellers may sell their application at a certain premium to the buyer through a grey market dealer.
    • This kind of trading is called application trading or ‘kostak’. In the case of ‘Kostak,’ the seller does not have to worry about the share allotment in IPO. Whether he receives the allotment or not he gets the premium at which he sold his IPO allocation.
    • Grey market dealers get the application details from the seller and send a notification to the buyer that he bought an IPO application at a certain premium from the sellers in the grey market.
    • The allotment is done by the issuing registrar. The application seller sold may or may not receive an allotment of shares.
    • If shares are allocated to the sold application, the seller may get a call from the dealer to sell them at a certain price or to transfer allocated shares to some Demat account.
    • In the case of selling the shares, the settlement is done based on the profit or loss.
    • If no shares are allocated to the sellers the deal is terminated without any settlement. The seller still receives his premium as he sold his application.

How come the grey market fluctuates every day?

The grey market fluctuates like the listed stock price. It is based on demand and supply. More buyers than the seller will augment the grey market premium, while more sellers than the buyer can pull it down.

Q From where can I know the present rates of premium on a share in an IPO grey market?

Based on the demand and supply of the company the IPO of the company can be positive or negative.

The grey market is not a regulated market and anyone can buy or sell shares before the commencement of the IPO and listing

Q Who pays the brokerage when selling shares on a listing day in the grey market transaction?

Clients who allowed the shares and sold on the day have to pay the brokerage. That’s why it is significant to open an account with a discount broker.

Q Should IPO investors consider grey market premiums before applying for an IPO?

Yes, the investors can consider it as one of the parameters before applying for IPO stocks. It is to be noted that the grey market premium does not guarantee listing gains or long-term gains.

Grey market premium may change in the duration when you apply for IPO and when the issue gets listed.

An IPO investor should consider various factors before applying for an IPO such as company financials, business model, promoters, issue size, upcoming projects, or investment plans

Final Words

I hope you had a great time reading about the “IPO grey market premium”. If you like it please do share it among friends and colleagues via Facebook and Twitter.

I hope you find the information regarding Grey Market India useful.

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Thanks for reading and have a nice day.

Disclaimer:

– IPO Grey Market Premium (IPO GMP) mention is valid for the specific date as mentioned in the header.
– We are not buying and selling IPO forms on IPO Grey Market.
– 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.
– Do not subscribe for IPO by just seeing the premium Price as it may change time before listing. Subscribe only considering the fundamentals of the companies.

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