Every time an IPO opens, one phrase floods WhatsApp groups and search results: “What's the GMP?” It sounds official. It isn't. Here's what GMP actually is, how people use it, and why it should never be the only reason you apply.
GMP stands for Grey Market Premium. Before an IPO's shares list on NSE or BSE, some dealers informally quote a price at which they'd buy or sell the shares, or the application, in advance. The difference between that quoted price and the IPO's issue price is the GMP.
It's called the “grey” market because it sits outside the regulated stock exchanges. No exchange runs it, no regulator supervises it, and there's no official record of the numbers.
People use a simple calculation to turn GMP into an indicative listing price:
| Issue price | GMP | Indicative listing price | Indicative gain |
|---|---|---|---|
| \u20b9100 | \u20b920 | \u20b9120 | 20% |
| \u20b9200 | \u20b940 | \u20b9240 | 20% |
| \u20b9500 | \u20b915 | \u20b9515 | 3% |
| \u20b9150 | -\u20b910 | \u20b9140 | -6.7% |
A positive GMP means the informal market expects the shares to list above the issue price. A zero or negative GMP means little or no premium is expected. A commonly quoted rule of thumb is that a GMP above roughly 20% signals strong unofficial demand, 10–20% is moderate, and below 10% is weak. Treat those bands as loose labels for sentiment, not as predictions.
You'll also see these grey market terms on GMP websites. Kostak is a fixed amount some dealers pay to buy an investor's IPO application, regardless of whether it gets allotted. Subject to Sauda is a premium that is payable only if shares are actually allotted. Both are informal, off-exchange arrangements with no regulatory protection, and we don't suggest taking part in them.
Our IPO Watch page brings dates, price band, lot size and a simple GMP rating together, but the rating is a summary of an unofficial indicator, so use it as one input among many. If you decide to apply, here's how to apply for an IPO step by step.
Educational information only, not investment advice or a recommendation to apply for or avoid any IPO. GMP is an unofficial indicator and is not endorsed by SEBI or any exchange.
IPO Watch shows this week's IPOs with price band, lot size, issue size and a simple GMP rating, all in one place and refreshed daily.
OPEN IPO WATCH →GMP stands for grey market premium. It is the unofficial extra amount at which an IPO's shares are being traded or quoted in an informal, off-exchange market before the shares list on the stock exchanges.
Estimated listing price = issue price + GMP, and estimated listing gain % = GMP ÷ issue price × 100. For an issue price of ₹200 and GMP of ₹40, the indicative listing price is ₹240, a 20% premium. This is only an indication, not a forecast.
Not reliably. GMP can move sharply between the application dates and listing day, differs across sources, and can be influenced by rumours and sentiment. Some high-GMP IPOs have listed at a discount and some low-GMP IPOs have listed well.
No. The grey market is unofficial and is not recognised or regulated by SEBI or the stock exchanges, so there is no investor protection attached to it. GMP is best treated as a sentiment indicator, not as a price guarantee.
Read the offer document (DRHP/RHP), and look at the company's revenue and profit trend, debt, valuation compared with listed peers, how the money will be used (fresh issue vs offer for sale), promoter holding, and the subscription numbers across QIB, NII and retail categories.
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