IPOIntermediate
Grey Market Premium
GMP
An unofficial, unregulated price at which IPO shares trade before listing.
Detailed explanation
GMP is quoted by informal dealers and reflects sentiment, not value. It is thin, opaque, easily manipulated and has no regulatory standing. It often changes sharply in the final hours before listing and frequently misprices the actual listing outcome.
Example
An issue priced at ₹295 with a GMP of ₹60 implies an expected listing near ₹355 — an expectation that regularly proves wrong.
Why it matters
Many retail investors apply purely on GMP. Knowing what it actually is prevents treating a rumour as data.
Key points
- Not recognised or regulated by SEBI.
- Based on tiny, unverifiable volumes.
- Never a substitute for reading the prospectus.
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Educational content only. Definitions and examples are illustrative and are not investment, tax or legal advice.