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What Is Grey Market Premium (GMP) in an IPO?

Updated 2026-11-03

Grey Market Premium (GMP) is the extra price, over the IPO issue price, that buyers are willing to pay for IPO shares in an unofficial, off-market 'grey market' before the stock actually lists. A GMP of ₹100 on a ₹500 issue suggests the grey market expects the stock to list around ₹600.

It is unofficial and unregulated

The grey market is not run by the NSE, BSE, or SEBI. It's an informal network of dealers, the prices are rumour-driven, and there is no settlement guarantee. GMP figures you see online are estimates, not exchange data.

Why GMP is an unreliable signal

  • It reflects short-term hype and demand, not the company's fundamentals.
  • It can swing wildly in the days before listing and collapse on listing day.
  • It has no official status — nobody is obliged to honour it.

A better approach

Rather than chase GMP, read the DRHP/RHP to understand the business and valuation, and after listing, track the company's real results and price history — actual exchange data, not grey-market rumour.

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