Grey Market Premium: The Insider's Guide · Chapter 3 of 10
Reading the GMP Correctly
Three numbers
The GMP in rupees, the GMP as a percentage of the issue price, and the implied listing price. Percentage is the better way to compare issues of different sizes.
Worked example
Issue price ₹250, GMP ₹40. Percentage = 40 ÷ 250 = 16%. Implied listing price = ₹290. If one lot is 60 shares, the notional gain per lot is ₹2,400 before costs.
Trend over time
A GMP that rises through the three bidding days and stays firm after the close is stronger evidence than a number seen once. Track the number at open, each day, and at close.
Check the timestamp
GMP can move several times a day. A quote from the morning may be stale by evening, so always note when it was recorded and where it came from.
Key takeaways
- Compare GMP as a percentage of issue price.
- The trend matters more than a single number.
- Always check the timestamp and the source.
- Convert to a notional gain per lot to see the real stakes.