Reviewed on 24 Oct 2026 · Source: IPO Bulletin price tracking; concept checked against exchange and SEBI investor material
The grey market premium, usually shortened to GMP, is the extra price at which an IPO share is quoted in the unofficial grey market before it lists, shown as a premium over the issue price. Dealers in this market trade the right to receive shares, and their quotes reflect how much demand they expect on listing day. GMP is not regulated, not reported to any exchange and not guaranteed, so it can change several times a day and can fall to zero or turn into a discount without warning. It is a mood indicator, not a price forecast. A high premium often signals strong demand, but many issues with big premiums have still listed flat, and some with no premium have listed well. We always label GMP as unofficial and never treat it as a promise of listing gains. Use it only as one signal alongside subscription numbers, the company financials, the valuation and the overall market condition. Never borrow money to apply for an IPO because of a GMP figure.
Example: If an issue is priced at Rs 100 and the GMP is Rs 18, the grey market suggests a listing near Rs 118, an 18% premium. Nothing obliges the stock to open there, and a weak debut can erase the premium completely.
The grey market is an unofficial, unregulated market in which IPO shares or applications are traded before the shares are listed on an exchange. Participants buy and sell the right to receive allotted shares, or the application itself, at a premium or discount to the issue price, and that premium is the grey market premium, or GMP. Deals are made on trust between dealers, with no exchange, no clearing house and no legal protection, and they are not recognised by SEBI. The grey market is closely watched because the premium reflects what a small group of traders expects the listing price to be, but the signal is often wrong and can be manipulated by those who have an interest in the outcome. Investors should never pay money in the grey market or treat GMP as a promise, and it should not be the sole reason to apply for an IPO. Participating in unofficial trades carries counterparty risk, the possibility of default, and potential legal and tax issues. IPO Bulletin reports GMP only as market information, with the date and a clear warning, and not as advice or a forecast.
Worked example
If an issue is priced at Rs 100 and the GMP is Rs 18, the grey market suggests a listing near Rs 118, an 18% premium. Nothing obliges the stock to open there, and a weak debut can erase the premium completely.
