What is GMP in IPO? Grey market premium explained
The grey market premium (GMP) is the unofficial price difference at which an IPO’s shares are said to trade before they list. If an IPO has an upper price band of ₹100 and the GMP is ₹20, the grey market is “expecting” the shares to list near ₹120.
How the estimate is worked out
- Estimated listing price = upper price band + GMP.
- Estimated gain % = GMP ÷ upper price band × 100.
- Estimated gain per lot = GMP × lot size.
Example: band ₹95–₹100, lot 150 shares, GMP ₹20 gives an estimated price ₹120, estimated gain 20% and about ₹3,000 per lot (before costs and tax).
Related grey-market terms
- Kostak: a fixed amount some dealers pay for your IPO application, whether or not shares are allotted.
- Subject to sauda (SS): a deal in which the payment depends on allotment.
Why GMP is unreliable
- It is unofficial and unregulated. No exchange or regulator publishes it, and you cannot enforce a grey-market deal.
- It moves with rumours and sentiment, sometimes hour to hour, and can be manipulated.
- The actual listing price can be far from the GMP, in either direction.
- It tells you nothing about the quality of the business or the fairness of the price.
How to use it sensibly
At best GMP is one sentiment signal. Look at the company’s financials, the valuation against peers, the objects of the issue and the live subscription status first. Never apply only because a GMP is high.
LiveIPOData shows official exchange data on every IPO page. We publish GMP figures only from sources we can verify and label them as indicative.
Frequently asked questions
Is GMP legal?
Grey-market trading of IPO shares is not regulated or recognised by SEBI or the exchanges. GMP is reported as information, but you should not rely on it or deal in the grey market.
Can GMP be negative?
Yes. A negative GMP means the shares are expected to list below the issue price.
Last updated 2026-10-20. Information only, not investment advice.