IPO GMP Today, Latest Grey Market Premium Live Update

Live IPO GMP Rates

A positive IPO GMP means there is strong demand in the grey market for that IPO in another case a negative GMP means there is no or lower demand in the grey market. The demand will lead to a positive or negative IPO listing. Check the latest IPO grey market rates with estimated listing gain, Kostak rates, and Subject to Sauda rates today.

What is an IPO GMP?

IPO GMP, which means, Grey Market Premium of IPO indicates that people are keenly interested in giving more money than the actual price of the IPO additionally, it’s a process between issue price and listing price. People who are interested in IPO pay more amount to sellers and sellers sell shares to secure their risk management and profit in the unofficial market as per their assumption.

Full-Form and Explanation of IPO GMP

Grey market premium demonstrates the IPO’s value and possibilities of higher opening providing profit to investors. Investors have paid that premium on shares even though shares have not been officially listed on the stock exchange or the upcoming IPOs.

To cite an Example; ABC company is going to launch an IPO of 2500 crore, and the issue price is 100  and the premium of that IPO is Rs 50, so the possibility to open with Rs 50 plus on the listing day so that the listing price could be Rs150.  

How GMP Relates to IPOs

IPO GMP is one of the ways to indicate the demand for an IPO in the market, most of the time the premium is crucial counting for retailers and other investors demonstrating that the listing price of an IPO would be higher if GMP is in the maximum amount, in the sharp contrast low GMP, might have chance to get low price on listing day. Additionally, a higher premium always fosters stakeholders to have an eye on shares hoping that on listing day, the share price will be more than the cut-off price. while showing a lower premium makes fear in investors’ minds that the listing price might be lower than the cut-off price and shares will be open at a discount.

What is Kostak’s Rate?

Simplify said, the Kostak rate is going in the unofficial market, which means investors would get a fixed rate from Broker whether they allotted for IPO or not.

To Cite an example- A person applies for an IPO and gets Non allocated still that person gets a fixed rate of RS 400 in the grey market. 

What is Subject to Sauda?

Subject to Sauda, both buyers and sellers decide on an IPO, however, if buyers get an IPO allotment the deal will be applied.

How IPO GMP Works

Grey Market Mechanism

• Informal Nature of the Grey Market
  • The informal nature describes the originality of GMP leading IPO shares, which are unofficially sold without being listed on the stock exchange. Grey market premium In addition, this is the platform where investors are unofficially buying and selling the shares of IPO which are not even listed in the market.
  • GMP is the one kind of prediction of IPO showing that people are bidding in the grey market means an unofficial market that does not even list on stock exchanges expecting the listing price would be as per their expectation and investors will gain profit. However, there is no trading history in grey market premium to ensure the IPO’s future. It is an unofficial but important market for most of IPOs.
• How Buyers and Sellers Interact in Grey Market
  • The grey market is important for both sellers and buyers in the IPO.
  • If the seller believes that the IPO would be listed at a lower price on IPO listing day, in that case, a seller can sell their purchased share in the grey market and round up their money. 
  • So many times sellers think that an IPO would be listed at a discount admiring the GMP ratio. Therefore they can decide to sell their shares in the grey market before it’s listed on the market
  • There are a lot of sellers who want quick profit and assume the IPO will be open at a lower than cut-off price, so before the listing they sell their shares and get rid of from risk of IPO.
• Buyers interact in Grey Market
  • By checking the entire financial background majority of investors invest their money in a grey market and purchase lower-price shares, showing trust in their financial background that the share will be open higher indicates that IPO will provide a premium, which is currently called.
  • As per the GMP, investors think that they would get profit once shares are listed at a higher price and get profit, however, it does not always give surety profit.
  • Short-term buyers most of the time give importance to GMP as it gives them positivity of increment in shares. Buyers can also get risk because sometimes grey market premiums can be down, or premium is not the assurance of a higher price of shares on the listing price.

How to calculate IPO GMP?

IPO grey market premium is the process between buyers and sellers in an unofficial market. The calculation is based on the company’s performance, demand in the grey market, and the chance of subscription. Assuming the X IPO price is fixed at ₹500 and the grey market rate is ₹200, the IPO might list at ₹700 (i.e. ₹500+₹200).

• Factors Influencing GMP Values
  • Mostly, Grey Market Premium indicates the IPO’s value in the market, as the IPO’s listing price will be higher or lower on listing day. 
  • However, there are so many factors are affect GMP values, which are described below this line for better understanding.
    • Assets represent the company’s stability and assurance of financial obligation and maintain cash flow, in difficult situations, assets could be part of solutions. Lower misconceptions of Assets pave lower demand in market-leading Lower the premium. 
    • Revenue capacity is a way of identifying a company. Consistency in revenue-generating helps higher demand and tends to great GMP.
    • High Price band is also a concern for the grey market premium, it affects because higher cut-off prices can damage investors’ expectations, additionally, not all retail or other categories like to invest. Moreover, higher prices increase investment amounts for them leading to lower demand for GMP.
    • Debt is a noticeable term for investors believing that high debt reduces demand for IPO premium can be affected.
  • Relationship Between GMP and Listing Gains
    • grey market premium and Listing gains have a straight relationship, additionally, if GMP is high means the listing price of shares can be higher than the price band.
    • If GMP is lower than expectation or no listing price of share could be opened in discount.
    • In addition, GMP is one kind of prediction of IPO listing means the demand for IPO is higher and people are keen to pay more amount than the actual price in a grey market which increases the value leading to listing gain being more than the invested value. 
    • To cite an example, Waree Energies Limited IPO’s price band was Rs 1503 and GMP price was 1,275, at a result it was listed at 2,500 means more than the price band due to premium.
    • In sharp contrast, a lower GMP alert than that IPO doesn’t have expected demand in the grey market and it might scare investors to invest. Moreover, a lower GMP has a chance of lower listing gain.
    • For example, Deepak and builders’ issue price was 203, and GMP ratio was 30% and the IPO was listed at 200. 
    • Grey market premium and listing gain have a crucial relationship they both enhance the company’s reputation and market sentiment. Moreover, GMP indicates the scale of sales and listing gain shows new shares market growth and long-term profit.

Importance of IPO GMP for Investors

Predicting IPO Performance

• Role of GMP as a Leading Indicator
  • Initially, a Grey Market Premium is a difference between the issue price and traded shares in an unofficial market. Moreover, this premium could be plus-minus based on investors’ sentiments. In addition, investors’ sentiments mean in the unofficial market shareholders are curious to pay a high amount, trusting that once it is listed they will get a profit. High GMP is a positive investor sentiment representing institutional and retail investors’ contribution. This kind of signal shows that once shares are officially listed they will go far means long-term financial growth.(Post-IPO Performance)
  • In sharp contrast, low GMP indicates lower demand for IPO by investors in the unofficial market and concern about the firm’s current situation, certain revenue, fluctuating growth, and many more. that might have a possibility to have a loss on a listing day.
• How Accurate is GMP as a Predictor?
  • Initially, IPO premiums can be beneficial for investors as clarified regarding profit. This is the key to an assumption of an initial public offering because it can be incensed by the company’s several prospectuses such as how the company has financial background brand awareness and market sentiments. 
  • If a company is reputed to paving substantial demand in an unofficial market and investors are ready to maximize the amount per the grey market.
  • Oversubscription of an IPO almost always has a maximum premium as all kinds of categories of investors have invested their finances. However, it does not always work because, under some circumstances, expectations, or demand for shares could be lower.

Decision-Making Tool

• Assessing Investment Risks
  • Undoubtedly, most of the time premium works to calculate investment risk.
  •  In addition, sometimes IPO demand is lower in unofficial(grey market) due to market down or other circumstances such as market sentiment, GEO political issues, GDP growth, and uncertainty in a market, FII selling their shares in grey market, higher inflation even though the company has performed well and made a good reputation amongst others. therefore investors could predict listing gain or risk as per the GMP. Moreover, some of the investors could take risk of their IPO listing gain.
• Evaluating Potential Returns
  • The majority of IPOs perform well in the market with a great GMP. Owing to market strategies, maximum revenues, promoter holding, and return on equity share are the main trustable points of any company.
  • With the GMP, investors can assume that how much profit they would get means listing gain would be around IPO premium percentage.
  • To cite an example;
    • Sagility India ltd issue price was Rs 30 with 1% premium, while it was listed at Rs 1.
    • NTPC Green Issue price was Rs 108 with 2% premium, while it was listed at 111.50.
• However, there are other IPO that have higher than premium predictions, indicating that demand in the grey market was more due to the company’s brand and market strategies.
  • To cite an example;
    • Bajaj Housing’s issue price was Rs 70 with ₹78, while listed at Rs 150. 
    • Waree Energies’ issue price was Rs 1503 with 1502, while listed at RS 2500.

Factors Affecting IPO GMP

Demand and Supply in the Grey Market

• Popularity of the IPO
  • IPO popularity matters a lot for GMP affection if any company has a low brand reputation has never made satisfactory revenue or has lower revenue that affects IPO premium. Because in an unofficial market, investors might think of loss and demand would get less than expected.
  • Moreover, IPO fulfillment always depends on the brand and outlook of a company that paves GMP. 
  • If the IPO does not have media attention means that not very popular or not as per the investors’ expectations.
• Market Sentiment Analysis
  • This factor is the second main stage, wherein it is likely to have ups and downs. Market low sentiments lead to lower premiums on initial public offering. Most of the time market sentiments are down means it is going down so expecting listing gain might be not possible or having chances for a discount.

Company Fundamentals

• Financial Performance
  • Financial performance is very important for a higher premium of any IPO. how it’s working?
  • Mainly, public and substantial investors such as mutual funds, banks, foreign investors, and others always have alert research of finance of a company. It is a reliable and major step for long-term investment and assures all of them, of long-term profit. 
  • The company’s financial balance sheet helps it to check turnover and how much it has ongoing projects indicates future revenue or planning. Owing to this all financial background one can easily plan for IPO’s subscriptions. if they do not have clarification on all these things that leads shareholders to stay away from IPO.
• Growth Potential and Industry Outlook
  • This is considered a valid point because if a company does not have sufficient growth leads away investors from paying higher than demand. The growth of the company, how a company is performing in the stock market, plans of projects, and increments in profit and loss are the factors of GMP. Furthermore, many of the time industry outlook matters as it does not allow firms to grow.  
  • For example, X company has Rs 100 and plans to reach Rs 500, conversely, the industry outlook has barely Rs 90, thus for a firm not possible to reach even Rs 102.

Overall Market Conditions

There are many situations in which IPO were stable and going to hit but market conditions were not as per expectation so they have not received listing gain or assumed profit. Market sentiments and other circumstances such as foreigners selling shares, inflation, and other conditions might shake IPO performance.

To cite an example, the SBI card’s overall performance and financial stability were good, but due to the coronavirus situation, it was not listed as per the expectation.

• Stock Market Trends
  • This also can be considered one of the main points affecting GMP. if a trend is going down or fluctuating, might have affection in IPO premium.
• Economic and Political Climate
  • If the broader economy is expanding, increasing consumer spending, business investments, and overall growth can foster shareholders to invest, disastrous economic growth and uncertainties give predictions of lower future profit and loss.

Pros and Cons of Tracking IPO GMP

While monitoring IPO GMP is valuable for investors, it also comes with various Advantages and Limitations. Here are some of the pros and cons of tracking IPO GMP as follows:

Advantages of tracking IPO GMP

• Early Insights into Market Sentiment
  • By tracking IPO GMP, one can constantly check the Grey market premium and can check whether the IPO is in strong or weak demand. The higher GMP indicates that the IPO might be open above the cut-off price and if the GMP is low the IPO might be open at a discounted price. Monitoring IPO GMP provides the investors with an expected premium on the issue price on the listing date. GMP is a satisfactory way to assume a high premium on shares on a listing day. It is a great way for investors to check profit by looking at GMP and whether they have profit or loss on the IPO.
• Quick Evaluation of IPO demand
  • IPO demand can be based on market conditions and investors’ excitement around the IPO. Investors can quickly evaluate the IPO demand based on the company’s strong financial growth, and solid business model, and attract investors’ interest in the IPO. One can evaluate the IPO demand by checking the other similar IPOs’ price range, and check if it’s logical, and if yes, investors can think of applying for the IPO.
  • Financial experts who have an in-depth evaluation of the share market boost the confidence of investors in investing in the IPO. Investors who prefer safer investments, should not fall for speculations around IPO and evaluate IPO demand based on companies financial growth.

Limitations of Tracking IPO GMP

Potential for Misleading Trends

Investors who make decisions through only IPO GMP can result in misinformation and manipulation. The IPO GMP is not a proper space to decide whether you want to invest in the IPO or not. As well, IPO GMP can sometimes be fabricated to influence investors into applying for an IPO or overpaying for shares. GMP trends usually show speculative activity rather than a company’s actual financial health or potential.

Lack of Regulation

IPO GMP is unregulated and an unofficial market, not monitored by SEBI or any authorities. This means the GMP figures can get easily manipulated and can create false expectations for investors about the IPO. The absence of authorities and regulations determines that GMP tracking is an unreliable predictor of IPO performance. Investors who have ignored official companies’ financial backgrounds and traded by just looking at the GMP have also experienced extreme losses. 

IPO GMP is unregulated and an unofficial market, not monitored by SEBI or any authorities. This means the GMP figures can easily fluctuate with Market sentiment, GEO political issues, GDP growth, uncertainty in the market, Foreign institutional investors selling shares in the grey market, and higher inflation are some of the things investors must look after before applying for an IPO.

How to Use IPO GMP Effectively

Using IPO GMP effectively can lead you to become the best in trading. However, using IPO GMP effectively requires various strategies and factors. Here are as follows:

Strategies for Retail Investors

IPO GMP is a part of the decision-making process for many retail investors when estimating IPOs. However, to avoid any losses and maximize benefits, investors should follow a strategic approach where they can reduce losses and expand benefits.

• Identifying Red Flags
  While tracking IPO GMP can offer you benefits it does have certain red flags like it can provide misinformation and force them to make misleading decisions. When using IPO GMP it is crucial to identify the red flags that help investors to stop making bad decisions. If you are a retail investors who want to use IPO GMP effectively, the following are some of the red flags that one should keep in mind:
  • Usually high GMP: In some cases, higher than expected GMP can lead retail investors into manipulation and speculation around IPO instead of checking a company’s financial background. To identify and avoid this red flag the retail investors should not only depend on the GMP figures but should compare the GMP with the company’s financial growth, valuation, revenue, promoters, and ROE.
  • Manipulated High GMP: Sometimes the higher GMP figure despite the company lacking strong financial growth or showing low demand usually indicates that the GMP can be artificial/manipulated.
  • Mismatch with subscription data: A weak or mismatched subscription data and high GMP among QIBs indicate that the GMP might be fabricated. Retail investors should always look for QIBs and NIIs subscription data before investing in them as they tend to have deeper analysis. Strong subscription boosts confidence of the retail investors allowing them to decide whether or not to apply for an IPO. Low subscription and high GMP is a red flag while the high GMP with strong QIB interest shows a positive indicator for the company as well as for investors. 
  • Consistently Negative GMP: In contrast to a constant positive GMP, a low GMP with a strong company background is also a big red flag. This means that companies lack confidence in the IPO or believe its price is too high compared to its value. In this case, the investors should do a background check on the IPO’s financial growth and decide whether or not the company has potential insights, and if yes then investors should think if they should apply for the IPO or not.
  • For example: the parent company of the BlackBuck app, made its debut on the stock exchanges on Friday, November 22, with a 0 GMP with the issue price of 273. However, on the National Stock Exchange (NSE), the shares opened at Rs 280.90, reflecting a 2.89% premium over the issue price of Rs 273. This shows that even though the GMP was on the negative side, the cut-off price of the IPO is rs 280 offering 2.89% profit on the issue price.
• Combining GMP Data with Other Metrics
  Only tracking IPO GMP can create Speculating sentiment, but combining GMP data with other metrics helps retail investors get a more detailed understanding of the company’s IPO. Following are some points where investors can get profit by combining GMP data with other metrics.
  • Compare peer and industry comparisons: Retail investors can compare similar companies and industries that are in the same sector as the IPO they want to invest in. This way they can decide whether or not they should buy an IPO. 
  • Analyze market mood: It is crucial to analyze various market conditions like GEOpolitical issues, GDP growth, uncertainty in the market, Foreign institutional investors selling shares in the grey market, and higher inflation are some of the key things investors must keep in mind before investing in the IPO.
  • Analyzing fluctuations in the GMP: Constant fluctuations in the IPO GMP can show that the GMP figure is influenced by short-term speculation rather than the actual demand for the IPO. However, when you see stable GMP and strong financial health and growth of the IPO, it offers assurance to the investors and more likely IPO will do well in not only the short term but long term. While Inconsistent GMP movements show that someone might be manipulating the GMP figure, in such cases, the IPO might need deeper analysis like financial background, growth, revenue, profit, etc.

Strategies for Institutional Investors

Mutual funds, private equity firms, and portfolio managers are some of the Institutional investors who use IPO GMP to decide whether or not to apply for the IPOs. However, with IPO GMP many other strategies and factors help institutional investors to make precise decisions.

• Enhancing IPO Allocation Decisions
  Market Insights, companies’ financial background, revenue, and growth, are some of the factors that institutional investors should consider to enhance the decision of allocating funds in the IPOs. Given below are some of the points institutional investors must keep in mind for making better decisions.
  • Strengthen fundamental analysis: It is crucial for institutional investors to not only depend on IPO GMP but also analyze the company’s competitive strength. Institutional investors must analyze the financial health of the IPO by checking revenue growth, profitability, and cash flow. As well as analyze the competitive positioning and scalability of the business model. Analyze the vision and mission of the company and understand the trends, challenges, and opportunities to make better decisions.
  • Support data and analytics: Institutional investors should always look for QIBs and NIIs subscription data before investing in IPOs as they tend to have deeper analysis. Strong subscription boosts confidence for institutional investors allowing them to decide whether or not to apply for an IPO. Institutional investors can purchase big data tools and analytics to analyze large datasets, look through the company’s insights, and improve their decisions according to the analyses. 
  • Choose high-quality IPO GMP: Institutional investors should only choose high-quality IPO with the help of Anchor investors. Who has the privilege to get approved to subscribe for an IPO before the subscription is open to the public providing a boost of confidence for institutional investors to choose whether or not to believe in IPO GMP.
• Long-Term vs Short-Term Perspectives
  investors must decide if they want long-term or short-term benefits from IPO GMP before applying for any IPOs. Here are the long-term and short-term perspectives as follows:

Examples of IPOs with High GMP

Notable Success Stories

In the past, many IPOs with high GMP have shown immense success, displaying that many IPOs listed based on the given future prediction and showing future market sentiment. Many IPOs have listed more than the cut-off price as per the premium. Following are some of the IPOs who have had extreme success due to their High GMP:

• Waaree Energies: Waaree Energies Limited is India’s biggest producer of solar PV modules, and has made its debut in the past on the stock exchange with an Issue price ₹1,503 with GMP ₹1,275. However, on the stock exchange, the shares listing price was ₹2,500 reflecting a 50% premium over the issue price of ₹1,503.
• KRN Heat Exchanger: KRN Heat Exchanger and Refrigeration Limited Established in 2017 is one of the leading manufacturers & exporters of copper/Aluminium fin and tube type heat exchangers for the Heat Ventilation Air Conditioning and Refrigeration Industry, participates on the stock exchange with an issue price of ₹220 with ₹230 GMP. But, on the stock exchange, the share opened with a listing price of ₹480 reflecting a 50% premium over the issue price of ₹220. 
• P N Gadgil Jewellers: The company made its debut on the stock exchange with an issue price of ₹480 with a GMP of ₹300. However, on the stock exchange, the shares listing price was ₹840 reflecting a 55% premium over the issue price of ₹480.
• Bajaj Housing Finance: The company made its debut on the stock exchange with an issue price of ₹70 and with GMP of ₹78. However, on the stock exchange, the shares listing price was ₹150 reflecting a 50% premium over the issue price of ₹70.
• Premier Energies: The company made its debut on the stock exchange with an issue price of ₹450 with a GMP of ₹470. However, on the stock exchange, the shares listing price was ₹990 reflecting more than 50% premium over the issue price of ₹450.

How GMP Played a Role in Their Success

GMP played a very major role in the success of the above-given IPOs by providing them with potential figures, and market demand, and allowing people to figure out the listing price of the IPOs with the help of GMP.

IPO GMP shows the higher demand for IPO in the grey market, which means investors are always ready to offer a higher amount than the actual amount of IPO indicating companies financial background represents that higher demand for IPO. The higher the GMP, the higher investors’ interest, creating positive strength. Additionally, a higher GMP due to the demands of investors is a prediction of a successful IPO. GMP played a role in the success of many IPOs by creating excitement, expectations, higher subscriptions, and possibly good listing prices.

Instances of Overhyped IPOs

In the past many IPOs have been overhyped because of high Grey market premiums, false advertisements, impossible expectations, and bad financial growth resulting in poor listing performance. Here are some of the examples where the IPOs were overhyped but did poorly in stock listing.

• Hyundai Motors India: Hyundai Motor India is a part of the Hyundai Motor Group, the third largest auto original equipment manufacturer. In the past, Hyundai Motors India had made its debut on the stock exchange with an Issue price ₹1960 with GMP ₹45. However, on the stock exchange, the shares listing price was ₹1934 reflecting a 2% discount over the issue price of ₹1960.
• Afcons Infrastructure: Afcons Infrastructure Limited is one of India’s largest international infrastructure companies that has participated on the stock exchange with the issue price ₹463 with GMP ₹15. However, on the stock exchange, the shares listing price was ₹426 reflecting a fat 8% discount over the issue price of ₹463. 
• IRM Energy: IRM Energy made its debut on the stock exchange in the past with an issue price ₹of 505 with ₹15 GMP. However, on the stock exchange, the shares listing was ₹478 reflecting a 5% discount over the issue price of  ₹505.

Lessons Learned for Investors

From the above examples, Investors should learn to not always rely only on GMP figures but always analyze a company’s financial background. Investors must beware of the IPOs that show strong GMP but lack a strong financial background, revenue, and growth. As an investor, if you trust the IPO, prefer long-term investment to get extra benefits of the IPO. Very high GMP may reflect short-term benefits and not long-term, so investors must check the company’s background and decide if they should invest in the IPO or not. We as an IPOWatch team provide all the necessary details and advice in terms of IPO GMP. Make sure to follow us on all of the platforms to get instant updates on GMP or any IPO-related content.

Common Misconceptions About IPO GMP

Following are some of the misconceptions that investors think about the IPO GMP.

• GMP Guaranteed Success: Many investors speculate that the High GMP = Guaranteed Success and IPOs will list at a higher premium. However, that does not happen most of the time, The Grey market is just a glimpse that is driven by market speculation, investor sentiment, and manipulation where investors can assume the final listing price of the IPOs. With reflecting on Grey market premium, it is crucial to also check the company’s financial background, revenue, growth, cash flow, and various other companies fundamentals. 
• GMP is Always Accurate: The second most common misconception about IPO GMP is that it is always accurate. This is not true, GMP figure reflect various factors like market sentiment, the company’s speculation, and the investor’s mood. If the investors are excited about the IPO chances are GMP will be displayed higher and can change according to that. In contrast to that, if the investors have doubts about the IPO, the GMP figure might be low. As an investor, if you want to invest in the IPOs for the long term, only depending on the GMP figure is not recommended. Rather focus on the company’s strong fundamentals and decide.

Tips for Beginners Interested in IPO GMP

Are you a beginner who recently got interested in IPO GMP? Then the below-given section is for you. Following are the tips for beginners.

Understanding Market Trends

• Learn the basics of IPO GMP: IPO GMP, which means Grey Market Premium where the GMP figure describes the expected listing and the issue price of the IPO. From this, beginners can reflect on the GMP and can assume the listing price of the IPO. 
• Depends on the role of the market sentiment: While the Grey market can offer a glimpse of the IPOs, it is not always accurate. IPO GMP is usually influenced by investors’ excitement, market sentiment, and short-term demand. All these changes affect the grey market figure before the listing date. So, it is recommended to not only GMP but also look for the company’s financial growth.
• Beware of Market Manipulation risk: As Grey market premium is unofficial, the numbers can get easily manipulated resulting in losses of money. So, as a beginner beware of the risk, do not get influenced by the IPO GMP, and make sure to do your research.
• Do your research with the help of tools: Do not only follow the IPO GMP but do your research by checking the company’s price-to-earnings ratios, growth projections, and market forecasts, and check company fundamentals. 
• Don’t fall for the Hype: Sometimes GMP shows high figures due to the hype around that IPO, making the investor believe in the hype. Make sure to don’t fall for the trap and do your own research on the company.

Avoid Dependency on Grey Market

Do not only depend on the Grey market figure as it is just a glimpse of how the IPOs will work on the listing day. Usually, GMP figures trade from unauthorized and unofficial channels, depending on the market sentiment and hype around the IPO. Yes, with Grey market figures people can assume the Listing price but it does not provide an accurate figure leading investors to financial risks. 

As a beginner in IPO GMP, it is crucial to follow the Non-Institutional Investors (NII) and Qualified Institutional Investors (QIB) such as mutual funds, insurance companies, and banks, who have done detailed research and professional analysis and applied for the IPO show confidence in the company.

Conclusion

Key Takeaways About IPO Grey Market aka IPO GMP

Following are the key takeaways about IPO GMP that investors should keep in mind.

• IPO GMP or Grey market premium is an Unofficial amount that is traded in the grey market before its listing on the stock exchange.
• Depending on the market sentiment, higher GMP expresses that the IPO is in high demand and it might be listed at a premium than the actual issue price. On the other hand, Lower GMP indicates that there is very little interest in the IPO and it might be listed at a discounted price than the actual issue price.
• Grey market premium is just a display price for investors where they can expect the market price of the stock where if NII and QIB will show interest in the particular IPO chances are the GMP will stay higher.
• GMP will usually fluctuate depending on the demand and supply of the IPO shares. It will get high miraculously if investors are eager to buy more shares. Likewise, the grey market will fall if the investor has little to no interest in the IPO 
• shares or in case of oversubscription.
• Investors who are looking for quick gain known as short-term investors can benefit from GMP. For long-term investment, investors must not only check the the grey market rates but also do a complete check on the company’s background, product demand, revenue, and growth.
• GMP is not always accurate and not reliable. One cannot decide on how IPO stock will do just by looking at IPO premium figures as the grey market is just a speculation and unofficial.
• IPO GMP can be a useful sign for investors to decide whether or not to invest in the IPO. A higher GMP shows that the IPO likely will do better in the stock market, however, it is not fixed, as GMP is just a speculation and does not show if the IPO will benefit you or not.

Final Advice for Investors Conclusion

While IPO GMP offers a useful glimpse into the future prediction of how an IPO will do on the stock market, Even so simply relying on the GMP figure will not offer you success in your investment game. Now you may ask, whom to believe in terms of investment? Grey market can be beneficial to assume how the IPO will do in the market, despite that it is advised for investors to check the stability of the GMP with the company’s financial market and growth with your financial planning goals. I recommend all investors to always stay alert on the updated market trends and make decisions according to their financial condition. Lastly, if you have doubts about your investment choices, it is recommended to take expert advice from the IPOWatch team who can guide you on your query and will show you the right road.

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