Sun. Nov 27th, 2022


gray market premium aka IPO GMP That is the information that is calculated based on the demand of the company coming up with an IPO. The gray market informally begins in the unregulated market after the announcement of the IPO date and price band. IPO investors always look at the premium of an IPO before investing in it but it may vary according to market conditions, demand and subscription numbers.

Current IPO GMP Rates

Check out the latest IPO analysis and estimated gray market rates along with listing benefits as given below:

Subject to IPO cost and deal rates

Let’s see how to calculate Estimated listing price After adding a premium. If the gray market shows that the IPO rate is ₹100 and the IPO price is around ₹200, the estimated listing price would be around ₹300. based on calculation Listing Benefits IPO will be 50% of the price.

Listing of IPOs may vary against estimated listing price Grey Market Because of the bull/bear market or demand for the company’s shares. We have observed that some IPOs had low gray market but listing with high leverage, while some IPOs in 2021 where gray market was at higher level but listing was at lower level. Since gray market is always one of the strong factors for IPO listing gain calculation, but we advise investors to use gray market rates for information only, do not trade based on numbers.

Important points to consider about IPO GMP:

  • Gray market transactions are informal and involve the participation of IPO investors and stockbrokers. It depends on the trust between both the parties.
  • Read our IPO analysis before applying for IPO.
  • gray market rate Calculated and provided or obtained from market research or experts.
  • We do not recommend trading in the gray market as it is illegal.
  • cost rate Premium received by selling your IPO application (in an off-market transaction) to someone else before the issue is allotted or listed.
  • Do not subscribe to the IPO at the premium above. This may change at any time prior to listing.
  • Subscribe only keeping in mind the fundamentals of the companies.

Previous IPO Gray Market Premium for IPO 2021-2022:

IPO Gray Market FAQ:

What is Gray Market Premium?

,gray market premium“alias”IPO GMP“IPO is a term used by people in the market to check what the estimated price of an IPO can be. The gray market is informal but investors look at the gray market value of the IPO to get a certain return on the stock. The gray market IPO operates in the days preceding the listing and from the date of IPO commencement to the date of allotment. Indicates gray market premium How the IPO might react with the estimated price on the day of listing. Let’s see how the calculation goes. If the company comes up with an IPO of ₹100 and the gray market premium is around ₹20, we can assume that the IPO may get listed at around ₹120 on the day of its listing. But the truth is that it has no credibility. In most cases, IPO GMP works but in some cases it doesn’t. We have observed that if the IPO is in demand and the estimated HNI and QIB membership is at a high level, the IPO is listed around the given price with the estimated IPO GMP.

What is the cost rate?

The cost rate is the amount that an investor pays to the seller of the IPO application prior to the IPO listing. As the gray market reacts, the Costak rates react in the same way. Anyone can buy and sell their entire IPO application outside the market at cost rates and set their profit. Costak rates are applicable Whether the investor gets the IPO allotment or not, buyer should pay Kotak Rates for IPO, If someone has made 5 applications for an IPO and sold it at ₹1000 per application, it means that he/she has made IPO profit at ₹5000. Even if he gets allotment in 2 applications, his profit will be ₹ 5000. Now if he sells the stock and makes a profit of around ₹ 10000 then he has to pay the remaining profit of ₹ 5000 to the investor who bought the application. This is a safe way to sell your application in the IPO gray market.

What is under the deal?

According to the cost rate, subject to deal on application When investors get allotment of the firm on their IPO application, the amount fixed is. If any one buy or sell IPO application for deal on this subject then it means if he will get allotment then he can get said amount otherwise deal will be cancelled. One cannot decide his profit in this as it depends on the allocation. Again if someone gets an allotment and sold the application for around ₹10000 and the profit on the day of listing exceeds ₹15000, then the person who bought the application should pay ₹5000.

How to Calculate Gray Market Premium?

IPO GMP aka Gray Market Premium is a price that is traded in the gray market prior to the IPO listing process. The calculation is done on the basis of the performance of the company, its demand in the gray market and the potential for membership. Let’s say if X IPO is priced at ₹200 and the gray market is showing ₹100, it means that the IPO may be listed at ₹300 (ie: ₹200+ ₹100). Still, this is an assumption but the actual listing may differ from the gray market value.

Are Gray Market Stocks Safe?

It depends on the broker or the trading person and we suggest it is not safe. If you are trading in the gray market then it will be at your own risk. Fluctuations can happen at higher levels so it needs to be done with caution. as we suggest See IPO GMP for Listing Profit Purpose, Be smart and trade in the primary market only after listing.

How can I buy/sell IPO applications in the gray market?

There are no official people or businesses associated with the gray market. Some brokers buy and sell IPO applications based on IPO GMP subject to Kostak rates or deal rates. One should find local brokers who live between buyers and sellers and do gray market trading of IPO applications. Be aware of rates and then buy or sell.



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