IPO Grey Market Premium, Latest IPO GMP, and Kostak Rates
IPO Watch: Grey Market Premium, Latest IPO GMP, and Kostak Rates.
The grey market premium, also known as the IPO GMP, is information that is figured out based on how much a company’s IPO is expected to be worth. After the IPO date and price band are announced, the grey market begins informally on the unregulated market. IPO Before investing in an IPO, investors always look at the premium, but it can change depending on the market, demand, and a number of investors who sign up.
IPO GMP Rates at the Present time:
Check out the most recent analysis of an initial public offering (IPO) and the estimated grey market rates with listing gain below:
|IPO Name||Type||IPO GMP||IPO Price||Listing Gain|
|PNGS Gargi Fashion Jewellery||BSE SME||₹20||₹30||67%|
|All E Technologies||NSE SME||₹50||₹90||56%|
|Droneacharya Aerial Innovations||BSE SME||₹65||₹54||120%|
|Dollex Agrotech||NSE SME||₹–||₹35||-%|
|Uma Converter||NSE SME||₹5||₹33||15%|
|Arihant Academy||NSE SME||₹45||₹90||50%|
|Homesfy Realty||NSE SME||₹45||₹197||23%|
|Moxsh Overseas Educon||NSE SME||₹50||₹153||33%|
|RBM Infracon||NSE SME||₹7||₹36||19%|
|Radiant Cash Management||Mainline||₹–||₹-||-%|
|CMR Green Tehnologies||Mainline||₹–||₹-||-%|
IPO Kostak & Subject to Sauda Rates
|IPO Name||Type||Kostak||Subject to Sauda|
|PNGS Gargi Fashion jewelry||BSE SME||₹-||₹75000|
|All E Technologies||NSE SME||₹-||₹75000|
|Droneacharya Aerial Innovations||BSE SME||₹-||₹105000|
|Dollex Agrotech||NSE SME||₹-||₹15000|
|Uma Converter||NSE SME||₹-||₹10000|
|Arihant Academy||NSE SME||₹-||₹50000|
|Homesfy Realty||NSE SME||₹-||₹-|
|Moxsh Overseas Educon||NSE SME||₹-||₹25000|
|RBM Infracon||NSE SME||₹-||₹10000|
|Radiant Cash Management||Mainline||₹-||₹-|
|CMR Green Technologies||Mainline||₹-||₹-|
Let’s have a look at how to figure out the premium added to the expected listing price. The expected listing price is around 300 if the rate for an IPO on the grey market is 100 and the IPO price is around 200. The listing gain is estimated to be 50% relative to the IPO price.
Bull/bear market conditions or demand for the company’s shares could cause the IPO’s final listing price to differ from the expected listing price recommended by the grey market. We saw several IPOs in 2020 with a low grey market and big returns upon listing, and we saw a few IPOs in 2021 with a high grey market and low gains upon listing. We strongly advise investors to only utilise grey market rates for research and not to make trading decisions based on them, despite the fact that they are often one of the most influential variables in determining how much an IPO listing will earn.
Things to keep in mind about IPO GMP:
- The transactions on the grey market are not official, and IPO investors and stockbrokers take part in them.
- It depends on how much trust each person has in the other.
- Before you apply for an IPO, you should read our analysis of IPOs.
- The experts or market research is used to figure out and provide the grey market rates.
- Since it is against the law, we do not recommend trading on the Grey Market.
- Kostak Rate is the extra money someone gets when they sell their IPO application to someone else off
- the market before the issue is allotted or put on the market.
- Don’t sign up for the IPO at the price shown above. Before listing, it could change at any time.
Subscribe only if the companies are good at the basics.
Past IPO Grey Market Premium of IPO 2021-2022:
|Dharmaj Crop Guard||₹237||₹55||₹266|
|Inox Green Energy||₹65||Disc||₹60|
|Five Star Business Finance||₹474||Disc||₹468|
|Fusion Micro Finance||₹368||₹5||₹360|
|Tamilnad Mercantile Bank||₹510||₹15||₹495|
|CMS Info Systems||₹216||₹5||₹220|
|Anand Rathi Wealth||₹550||₹50||₹600|
|Aditya Birla AMC||₹712||₹25||₹715|
|Aptus Value Housing||₹353||₹0||₹333|
|Glenmark Life Sciences||₹720||₹90||₹750|
|Tatva Chintan Pharma||₹1083||₹1100||₹2111|
|Sona BLW Precision||₹291||₹5||₹301|
|Suryoday Small Bank||₹305||₹0||₹293|
|Easy Trip Planners||₹187||₹140||₹212|
|Brookfield India REIT||₹275||₹0||₹281|
|Home First Finance||₹518||₹150||₹618|
IPO Grey Market FAQs:
What is Grey Market Premium?
People in the IPO market use the term “IPO GMP,” which stands for “grey market premium,” to check what the estimated price of an IPO might be. The grey market is not official, but investors look at the price of an IPO on the grey market to figure out what the stock’s fixed gain will be. The grey market is active before the IPO is listed and in the days between when the IPO starts and when the shares are given out. The grey market premium gives an estimate of how the IPO might do on the day it goes public. Let’s keep track of how the math goes. If the company’s IPO is priced at 100 and the grey market premium is around 20, we can assume that the IPO will list for around 120. But the truth is that there is no trust. Most of the time, IPO GMP works, but sometimes it doesn’t. We have seen that IPOs list around the given price with the estimated IPO GMP if the IPO is popular and the estimated number of HNI and QIB investors is high.
What is Kostak Rate?
he Kostak rate is the amount that an investor pays to the seller of an IPO application before the IPO listing. The Kostak rates move in the same way as the grey market. One can buy and sell their full IPO application on Kostak rates outside of the market and set their profit. Whether the investor gets the IPO allotment or not, the Kostak rates should be paid by the buyer of the IPO. If someone filled out 5 applications for one IPO and sold them for 1,000 each, they would have made 5,000 from the IPO. Even if he gets the job after two applications, he will still make 5,000. Now, if he sells the stock and makes a profit of around 10000, he or she must give the investor who bought the application the remaining 5000 profit. This is the safest way to sell your app on the IPO grey market.
What is Subject to Sauda?
According to the Kostak rate, the amount that is “Subject to Sauda” on the application is the amount that will be decided when the investors get their “firm allotment” on their IPO Application. If someone buys or sells an IPO application about sauda, it means that person can get the said amount if they get the allotment. If they don’t get the allotment, sauda will be cancelled. In this, you can’t set how much you’ll make because it depends on how much you’re given. Again, if someone gets an allotment and sells the application for around 10,000 and the profit goes up to around 15,000 on listing day, the person who sold the application should pay the person who bought it 5,000.
How to Calculate Grey Market Premium?
The grey market premium, or IPO GMP, is a price that is traded on the grey market before an IPO is listed. The calculation is based on how well the company has done, how much it is wanted on the grey market, and how likely it is that someone will subscribe. Let’s say the IPO price of X is set at 200 and the rate on the grey market is 100. This means that the IPO might list at 300 (i.e., 200 + 100). Still, this is just a guess, and the price listed on the site might be different from the grey market price.
Are Grey Market Stocks Safe?
It depends on the broker or trader, but we don’t think it’s safe. You will be taking a risk if you trade on the grey market. There may be changes that are on the high side, so people need to be careful. As we have suggested, for the listing gain purpose, just look at the IPO GMP. Be smart and only trade after listing on the primary market.
How Do I Buy / Sell IPO Application in Grey Market?
There are no official businesses or people who are part of the grey market. Some brokers buy and sell IPO applications based on the IPO GMP using Kostak Rates or Subject to Sauda Rates. One should find local brokers who act as middlemen between buyers and sellers and trade IPO applications on the “grey market.” Pay attention to the rates and then buy or sell.