IPO GMP Today, Latest IPO Grey Market Premium

Live IPO GMP Today

Check the latest IPO grey market rates with estimated listing gain, kostak rates, and subject to sauda rates today.

What is IPO GMP?

The grey market is an unofficial market in which shares can be purchased and sold before listing on a stock exchange. GMP can be used to estimate investor sentiment toward an IPO. A high IPO GMP indicates that investors are positive about the company and expect its share price to rise once it is listed on the stock exchange. A low GMP suggests that investors think negatively about the company and expect the share price to fall when it lists.

It is important to note that the GMP is not always a trustworthy indicator of how the share price will perform once the IPO is listed on the stock exchange. A variety of factors can influence the share price on the listing, including the level of demand from institutional investors and general market conditions. The GMP is simply a measure of investor sentiment at a given time. The actual performance of the shares will be determined by several factors, including the company’s performance, overall market conditions, and others. The IPO Grey Market Premium (GMP) is a key factor that attracts the attention of potential investors. This article aims to provide a detailed understanding of GMP, IPOs, and their significance in the IPO grey market.

The IPO GMP provides an indication of market sentiment toward the IPO. If the GMP is positive, it means that the shares are trading at a higher price than the issue price, indicating high demand for the IPO. A negative GMP, on the other hand, indicates that the shares are trading below the issue price, showing that demand is weak.

Let’s look at how to calculate the estimated listing price after involving a premium. If the grey market rate for an IPO is ₹100 and the IPO price is around ₹200, the estimated listing price will be around ₹300. Based on the calculations, the listing gain will be 50% of the IPO price.

The listing of an IPO may differ from the estimated listing price suggested by the grey market due to the bull/bear market or demand for the company’s shares. We have seen that some IPOs had lower grey markets but listed with higher gains, whereas a few IPOs in 2021 had a higher grey market but a lower listing. As the grey market is always a strong factor in calculating IPO listing gains, we strongly advise investors to use grey market rates as information only and not to trade based on them.

The BSE and NSE circular says the SME IPO listing limit is set at a maximum of 90% over the IPO price. This limit will not be applicable on the main-board IPOs.

Important Points to Consider about the Grey Market:

• The grey market transactions are unofficial, involving IPO investors and stockbrokers. It is based on the trust between the two parties.
• Before submitting an IPO application, please read our analysis.
• Grey market rates are calculated and provided or sourced by market researchers or experts.
• We do not recommend trading in the grey market because it is illegal.
• The Kostak Rate is the premium received for selling an IPO application (in an off-market transaction) to someone else before the issue is allotted or listed.
• Do not subscribe to the IPO with the premium listed above. It might change the time before listing.
• Subscribe only after considering the company’s fundamentals.

More About Grey Market Premium

The IPO GMP or grey market premium is the premium or additional price at which IPO shares are unofficially traded before their official listing on the stock exchange. It shows the market’s assessment of the potential value and demand for the shares.

The “grey market premium” (also known as the “IPO GMP”) is a term used in the IPO market to determine the estimated price of an IPO. It is unofficial, but investors use an IPO’s grey market price to calculate the stock’s fixed gain. The grey market premium works before the IPO listing and during the days between the IPO start date and the allotment date. The grey market premium predicts the IPO’s performance on the listing day with an estimated price.

What Factors are Influencing IPO GMP?

Several factors contribute to the IPO Grey Market Premium, including:

• Company Fundamentals: Strong financials, growth prospects, and a reputable management team can positively impact the GMP.
• Market Conditions: Investor interest in initial public offerings is influenced by overall market sentiment, sector performance, and economic factors.
• Demand and Supply Dynamics: The number of available shares and the level of investor interest are important factors in determining the GMP.

What is Kostak’s Rate?

The Kostak rate is the amount paid by one investor to the seller of an IPO application before its listing. Kostak rates react in the same way that the grey market does. One can buy and sell their entire IPO application on Kostak rates outside the market to fix their profit. The investor receives an IPO allotment or not; the buyer must pay the Kostak rates for the IPO.

Selling 5 applications for an IPO at ₹1000 each results in a profit of ₹5000. Even if he receives an allotment in two applications, his profit remains at ₹5000. If the stock is sold for around ₹10000, the investor who purchased the application must receive the remaining ₹5000 profit. This is the most secure way to sell your application on the IPO grey market.

What is Subject to Sauda?

According to the Kostak rate, the Subject to Sauda on the application is the amount determined when investors receive an official allotment on their IPO application. If one buys or sells an IPO application on the subject of sauda, it means the investor will receive the stated amount if the allotment is granted; otherwise,  sauda will be canceled. One cannot predict their profit in this case because it is determined by the allotted amount. If you get an allotment and sell the application for around ₹10000 and make a profit of around ₹15000 on the listing day, you should pay ₹5000 to the buyer.

How to Calculate Grey Market Premium?

The IPO GMP, also known as the grey market premium, is a price that trades in the grey market before the IPO listing process. 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 ₹200 and the grey market rate is ₹100, the IPO might list at ₹300 (i.e. ₹200+₹100). Still, this is an assumption, and the actual listing may differ from the grey market price.

Is Grey Market Safe?

It is dependent on the broker or trading person, and we believe it is not safe. Trading on the grey market is entirely at your own risk. There may be higher fluctuations, so proceed with caution. As we suggest, simply refer to the IPO GMP for listing gain purposes. Make wise decisions and only trade in the primary market after listing.

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

There are no official people or businesses involved with the grey market. Some brokers buy and sell IPO applications using Kostak Rates or Subject to Sauda Rates based on the IPO’s GMP. One should look for local brokers who act as intermediates between buyers and sellers and trade IPO applications on the grey market. Be aware of the current rates before purchasing or selling.

Significance of IPO GMP

The IPO Grey Market Premium indicates market sentiment and the expected worth of the IPO shares. It allows potential investors to assess the level of demand and the premium they may have to pay to buy shares during the IPO. However, it is important to remember that the GMP does not guarantee future performance and is subject to change.

IPO Grey Market Premium Archive 2024 | 2023:

IPO GMP and Grey Market Premium FAQs:

Disclaimer

• The estimated IPO Grey Market Premium (GMP) mentioned here is valid for a specific time and it may change anytime.
• We do not facilitate the buying or selling of IPO forms on the grey market.
• Due to stock market conditions, the IPO listing might differ from the estimated IPO GMP price.
• It is highly recommended that all the rates shown here are for educational purposes. Do not subscribe to an IPO based only on the premium price, as this may change before the listing. Subscribe to an IPO based solely on the fundamentals of the companies.