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IPO Grey Market Premium (GMP)

GMP stands for grey market premium. It's a critical aspect of the IPO punting business that really gets people going on what's happening "outside" the legit markets.

The grey market is an unofficial market that exists in parallel with the official market. In the context of IPOs, the grey market is where unlisted IPO shares are traded.

It is here, at least in some portion, that the IPO punters get their kicks. And they get it by tracking what's called the IPO GMP.

The grey market premium or GMP is the amount, over and above the issue price, that traders are willing to pay or ask for to trade these yet to be listed IPO shares.

The IPO's GMP gives you an idea of the market's perception of the company and how it will perform on the listing day.

If you are looking forward to applying for an IPO, sure take a look to see what could happen on listing day.

But remember, the IPO's GMP shouldn't be the only factor influencing your decision on whether or not to hold or exit the stock.

If you are an investor, then we would say take the IPO GMP with a pinch of salt.

Since you're interested in IPO, check out the current IPOs and upcoming IPOs on our website.


Swiggy IPO to Open Next Week. Is it Worth the Hype?

Nov 1, 2024

Swiggy's Rs 113 billion IPO is almost here. Here's a closer look at whether it's worth considering.

Ola Electric IPO: The Spark to Ignite India's EV Revolution

Jul 29, 2024

Ola Electric IPO is poised to shake up the listed EV space, here's everything you need to know.

Ixigo IPO: 5 Things to Know

Jun 6, 2024

Ixigo IPO is poised to shake up the listed travel tech space, here's everything you need to know.

Tata Technologies IPO: Should You Apply?

Nov 16, 2023

With its proven track-record and strong lineage, will Tata Technologies tread on a similar path like Tata Elxsi and KPIT Technologies?

Tata Technologies vs Tata Elxsi: How these Tata Group Stocks Stack up Against Each Other

Oct 11, 2023

The upcoming IPO of Tata Technologies is one of the most anticipated IPOs of the year, and is being compared to Tata Elxsi, another Tata Group company that provides somewhat similar services.

Balaji Speciality Chemicals IPO: 5 Things to Know

Aug 9, 2023

From grey market premium to issue size, here's everything you need to know about the upcoming IPO of this specialty chemical player.

Senco Gold IPO: 5 Things to Know

Jul 1, 2023

This jewellery company is coming out with its IPO next week. Should you apply?

Cyient DLM IPO: 5 Things to Know About this Electronics Manufacturing Company

Jun 22, 2023

From grey market premium to price band, here's everything you need to know about the upcoming IPO of Cyient DLM.

IKIO Lighting IPO: 5 Things to Know About this Electronics Manufacturing Company

Jun 1, 2023

IKIO Lighting, a reputed LED manufacturer, is coming out with its IPO next week. Should you apply?

Udayshivakumar Infra IPO: 5 Things to Know

Mar 17, 2023

This road construction company is coming out with its IPO next week. Here are 5 key details.

Swiggy IPO Gets Bigger: Everything You Need to Know About the Rs 50 Billion Public Offer

Sep 13, 2024

Swiggy's IPO now aims to raise Rs 50 billion with a fresh issue. Here's what you need to know about this upcoming IPO.

Emcure Pharma IPO: 5 Things to Know Before Investing in the IPO

Jul 3, 2024

From GMP to price band to some unknown facts about the company, here's everything you need to know about this generic drug maker.

Tata Technologies IPO

Nov 23, 2023

With its proven track-record and strong lineage, will Tata Technologies tread on a similar path like Tata Elxsi and KPIT Technologies?

Our Take on the Tata Technologies IPO: The Good, the Bad and the Ugly

Nov 15, 2023

The Tata Technologies OFS is set to commence next week on 22 November 2023. Here's everything you need to know...

Tata Technologies IPO: 5 Key Takeaways from the Addendum

Oct 4, 2023

Tata Technologies gears up for IPO, files addendum to DRHP. Here's everything you need to know about this latest move.

Concord Biotech IPO: 5 Things to Know

Aug 2, 2023

From grey market premium to price band, here's everything you need to know about the upcoming IPO.

PKH Ventures IPO: 5 Things to Know

Jun 27, 2023

This civil construction company is going live with its IPO this Friday. Should you apply?

HMA Agro Industries IPO: 5 Things to Know

Jun 9, 2023

All you need to know about the upcoming IPO of HMA Agro Industries.

Nexus Select Trust REIT IPO: 5 Things to Know

May 2, 2023

India's fourth REIT is about to get listed on the bourses soon. Have a look at the company's financials, GMP and more.

Global Surfaces IPO: 5 Things to Know

Mar 3, 2023

The Indian primary market is buzzing with activity. Next week, a quartz company is coming out with its IPO. Check out more details inside.




FAQs

What is an IPO Price Band?

IPO Price Band is the price range within which investors can bid for the shares. The minimum price is called the floor price and the maximum price is called the cap price.

In case the company revises the price band, the offer period gets extended for at least three additional working days.

Any revision in the price band and the revised offer period, if applicable, is shared by notification to the stock exchanges by issuing a press release and on the websites of the book running lead managers.

What is GMP?

GMP stands for grey market premium. It is the amount, over and above the issue price, that traders are willing to pay or ask for to trade IPO shares. The GMP can tell you how an IPO will perform on its listing day.

If you are applying for an IPO, take a look to see what could happen on listing day. But remember GMP shouldn't be the only factor influencing your decision on whether or not to hold or exit the stock.

If you are an investor, then we would say take the GMP with a pinch of salt. A factor as volatile as GMP can't be a deciding factor.

Therefore, you should never apply for an IPO just because it commands a good GMP. You should apply for an IPO because you believe in the company's earning potential. Hence more weightage should be given to the fundamentals of the company.

What is a lot size?

A lot size is the minimum number of shares that an investor needs to bid for. It is different for each IPO and is fixed by the company.