IPO Basics 4 min read
Understanding Grey Market Premium (GMP)
What is GMP, how it works, and should you base your IPO decisions on it?
F
IPOfins Team
Finance Research & Data • June 2026
What is IPO GMP (Grey Market Premium)?
GMP is the unofficial premium at which IPO shares trade before listing. The grey market is unregulated and operates outside stock exchanges.
How GMP Works
If IPO price is ₹100-110 and GMP is ₹40, expected listing is ~₹150 (36% premium).
Factors Affecting GMP
- Demand-supply in grey market
- Overall market sentiment
- Subscription levels (QIB interest is key)
- Company fundamentals and sector outlook
Is GMP Reliable?
Directionally correct ~70% of the time but not always accurate. Can be manipulated and changes multiple times daily. Use as one signal alongside subscription data and fundamentals.