How the number is formed
The grey market is an informal, cash-settled network of dealers, mostly concentrated in a handful of trading hubs. When an IPO is announced, dealers begin quoting a premium over the issue price at which they will buy an allotment from someone who receives one. If an issue has an upper band of ₹300 and the GMP is ₹90, a dealer is offering roughly ₹390 per share for your allotment — implying they expect it to list above that.
There is no exchange, no clearing house, no order book and no regulator. Quotes circulate by phone and messaging groups. Two dealers can quote materially different numbers for the same issue at the same moment, which is why we publish a median across sources and show you the spread rather than a single figure.
Kostak and Subject-to-Sauda
Kostak is a flat price paid for your entire application, regardless of whether you receive an allotment. You take the money, the buyer takes the risk of getting nothing.
Subject-to-Sauda (STS) is a price paid only if the application is allotted. It is higher than Kostak, because the buyer only pays when there is something to buy.
What GMP does and does not tell you
At its best, GMP is a real-time sentiment reading — a small number of people putting their own cash behind a view on listing day. It often moves before subscription figures do.
But it is a thin market, and thin markets are easy to move. A handful of trades can shift a quote, and there is a long-standing incentive for interested parties to talk a premium up during the bidding window. GMP is also not a forecast of anything beyond listing day: it says nothing about whether a business is worth owning a month later.
Rather than ask you to take that on faith, we publish our full GMP track record against actual listing prices, including the IPOs where the grey market got it badly wrong.
Is grey market trading legal?
Grey market transactions are private agreements between individuals, settled outside the exchange mechanism. They are not conducted on any recognised platform, they carry no investor protection, and SEBI neither recognises nor regulates them. Nothing on this site is an inducement to participate in the grey market; we publish the quotes as market information because they are already widely circulated and readers deserve to see them with honest caveats attached.