Every time a hot IPO opens, the same question comes across the WhatsApp groups and Telegram channels: “GMP kitna chal raha hai? The IPO grey market premium is the number that is now checked more than the company’s financials in IPO investing in India.
And 2026 has provided folks with a lot of IPOs to look at. LSEG data indicates that Indian companies raised the highest amount of money ever, $12.5 billion, during the IPO process between January and September 2026. However, the same year also proved that GMP can go wrong: gains on double-digit premiums were reported as “flat” and the average gains on the day of listing decreased significantly.
I will discuss the concepts of the IPO Grey market premium, GMP calculation, what are the Kostak and Subject to Sauda, how accurate is the GMP, SEBI’s role and how to make use of it politically.
What Is IPO Grey Market Premium (GMP)?
The amount that people in the unofficial grey market will pay for the shares of the company before the listing on the stock exchange is called IPO grey market premium (GMP).
For instance, if the IPO’s price band is capped at ₹300 and the GMP is quoted at ₹60, it implies that the grey market is pricing the IPO at around ₹360. Positive GMP indicates demand, negative or zero GMP indicates weak demand.
The ‘grey market’ is not a market. It is an informal assembly of dealers mainly working over the phone or through messaging applications in urban areas, such as Ahmedabad, Rajkot, Mumbai and Jaipur. They make deals based on trust, settle in cash and are not behind by an exchange, clearing house or regulator.
How to Calculate Estimated Listing Price From GMP
The formula is simple:
Estimated listing price = Upper price band + GMP
Estimated listing gain (%) = GMP ÷ Upper price band × 100
| Example | Upper price band | GMP | Estimated listing price | Estimated gain |
|---|---|---|---|---|
| IPO A | ₹300 | ₹60 | ₹360 | 20% |
| IPO B | ₹150 | ₹8 | ₹158 | 5.3% |
| IPO C | ₹500 | ₹0 | ₹500 | 0% |
| IPO D | ₹220 | –₹15 | ₹205 | –6.8% |
For a retail investor applying for one lot of IPO A (say 50 shares), the GMP implies a notional gain of 50 × ₹60 = ₹3,000 – *if* you get an allotment and *if* the listing matches the GMP. Both are big ifs.
Kostak Rate and Subject to Sauda Explained
GMP isn’t the only number grey-market dealers quote. There are two others that crop up frequently and most guides explain them poorly.
What Is Kostak Rate?
A fixed charge that the dealer charges you for your entire IPO application irrespective of whether or not you secure an allotment. You agree to give the dealer any shares you allot (or on the day they are listed).
Example: the Kostak rate is ₹800. Only one lot, and the application is sold. You are paid ₹800 no matter if you are awarded shares or not. If allotted, the profit (or loss) on a listing is kept by the dealer.
What Is Subject to Sauda?
If you don’t get an allotment, then the deal is subject to Sauda. If allotted, the dealer pays a fixed amount per application, if not allotted, the deal is cancelled and no payment is made.
Example: The amount of Subject to Sauda is ₹3500. If you have only a single lot, you will receive ₹3500 and will share the profit or loss with the dealer. No deal if not allotted.
| Term | What’s being traded | When you get paid | Typical use |
|---|---|---|---|
| GMP | Expected premium per share over issue price | Not a payment – a price signal | Gauging demand |
| Kostak | Your whole IPO application | Whether or not you’re allotted | Locking a small sure amount |
| Subject to Sauda | Your application, if allotted | Only if allotted | Locking listing gain in advance |
Important: all three are informal side deals. They’re not enforceable through any exchange or regulator. If the dealer doesn’t pay, you have no official recourse.
IPO GMP Today: Snapshot (4 November 2026)
Below is a dated snapshot of grey-market quotes reported by IPO trackers for issues open or recently closed around 4 November 2026. These numbers change several times a day – use the live table on this page for current figures.
| IPO | Board | Reported GMP | Issue dates |
|---|---|---|---|
| Vedant Poly Fabs | SME | ₹11 | 2 – 4 Nov 2026 |
| Johnsoncab Electricals | SME | ₹8 | 30 Oct – 3 Nov 2026 |
| HGS (India) | SME | ₹25 | 30 Oct – 3 Nov 2026 |
| Maxwell Engineering | SME | ₹80 | 30 Oct – 3 Nov 2026 |
| Vectras Enprocon | SME | ₹0 | 30 Oct – 3 Nov 2026 |
| Bombay Coated and Special Steels | Mainboard | ₹9 | 29 Oct – 2 Nov 2026 |
| M.K. Sons Fine Jewels | Mainboard | ₹10 | 28 – 30 Oct 2026 |
Snapshot only. GMP is an unofficial grey-market quote compiled by third-party trackers. It is not verified by SEBI or the exchanges and can change sharply before listing.
How We Recommend Building the Live GMP Table
| Column | Why it matters |
|---|---|
| IPO name + board (Mainboard/SME) | SME GMPs are far more volatile and thinly traded |
| Price band and lot size | Needed to calculate gain per lot |
| GMP (₹) and estimated gain (%) | The core signal |
| Subscription (retail / NII / QIB, x times) | Real demand data from the exchange |
| GMP trend (rising / falling) | Direction often matters more than level |
| Open, close, allotment and listing dates | T+3 timeline at a glance |
| Last updated (date and time) | Freshness and trust |
How Accurate Is IPO Grey Market Premium?
But the question that is most important is this – and the truth is sometimes helpful, often incorrect and never certain.
When GMP Got It Wrong
Bonfiglioli Transmissions, which was listed 23 October 2026, had a premium of approximately 11% (around ₹66 per share) just prior to the listing. Its listing gain was just a mere 0% on listing at an initial price of Rs 586.
Lenskart Solutions (November 2025) reportedly opened at ₹55-₹120 as the GMP did not move at all during the issue, closed at zero at the time of listing and opened at the small discount.
Several problems with GMP higher than ₹200 are reported by the trackers on some of the high GMP, flat-listing cases in the last few days.
The analysis by one tracker on IPOs of the mainboards in 2024-2025 showed that 2/3 of them managed to hit within 15% of the actual listing price on the morning of the listing. In other words, about one-third of the time, it was off by over 15%.
The 2026 Reality Check: Listing Gains Are Shrinking
| Metric | Figure | Source/period |
|---|---|---|
| Mainboard IPOs | 109, raising ≈₹1.77 lakh crore (record) | FY26, Grant Thornton Bharat |
| SME IPOs | 258, raising ≈₹12,030 crore | FY26 |
| Average listing-day gain | 7% (down from 29% in FY25) | FY26 |
| Average subscription | 39x (down from 71x in FY25) | FY26 |
| Average performance of FY26 listings | –17% (as of report date) | FY26 |
| IPO proceeds, Jan–Sep 2026 | $12.5 billion (record) from 220 IPOs | LSEG |
| Average listing premium, Sep 2026 | 15.1% (median 5.9%) | LSEG |
| Companies with SEBI approval in pipeline | 130+ | As of Oct 2026 |
The message: There’s never been such a record amount of capital going to IPOs, but an easy listing in 2024 is lost. The reward of blindly applying on the back of a GMP has become much less rewarding – and more risky – with an average FY26 listing gain of only 7% and a median listing premium in September 2026 under 6%.
Why GMP Can Mislead
- Thin and/or opaque trading: A few dealers can change the quote, particularly in SME IPOs.
- Incorporating a promotion or an operator may be used to hyperevent GMP, and then let it go.
- If the Nifty is losing its lustre on the day of listing, it can make a premium vanish overnight.
- No accountability: nobody has to respect a quoted GMP, making its number free to be inflated.
- Retail applicants in heavily oversubscribed issues receive virtually nothing – therefore they can’t have gained anything.
Is IPO Grey Market Trading Legal? SEBI’s View in 2026
The grey market is not regulated by SEBI. It is not recognized on the SEBI, NSE or BSE, and the investor is not protected, nor is there a clearing guarantee nor a grievance system for transactions done on the grey market.
- Not recognised: GMP isn’t published, endorsed or verified by SEBI or the exchanges.
- Unenforceable deals: Kostak and Subject to Sauda agreements are informal promises and if a dealer defaults, SCORES or SMART ODR will be unable to assist you.
- Cash and tax: deals that are not transacted in the regular market are typically done in cash, which means that both sides to the deal will have problems with income tax and compliance.
- Counterparty risk – you rely completely on the dealer’s honesty.
SEBI’s Plan for a Regulated Pre-IPO Platform
In August 2025, SEBI chairperson, Tuhin Kanta Pandey had stated that the regulator was mulling a proposed platform to trade shares of companies before they go public – in part to shift the activity now taking place in the grey market to a legal and supervised platform. We have been unable to confirm that such an app is launched as of November 2026, please keep an eye out on SEBI announcements for updates.
Other IPO Rule Changes Worth Knowing (2025–2026)
- IPO are listed three working days after the IPO closing date, thus reducing the grey market quote duration.
- UPI Mandates: The retail investors must submit the application on the ASBA or UPI and money will remain blocked in the account till allotment.
- Large-IPO allocation changes: SEBI has invited comments on increasing the allocation of anchor teams as well as QIBs by reducing the retail component in very large (above ₹5,000 crore) IPOs. Review the end rules before applying for mega-IPOs.
- Reduction in minimum application amount from ₹2 lakh to ₹1 lakh for SME IPOs (consultation, October 2026): SEBI has proposed to lower the minimum application amount for SME IPOs from ₹2 lakh to ₹1 lakh, while also allowing single-share trading after listing. The changes aren’t yet in effect, as comments were accepted up until 4 November 2026.
- SEBI has prohibited SEBI-registered intermediaries from dealing with unregistered persons providing investment recommendations or accepting claims – a move that could impact many so-called “GMP tips” channels.
How to Use IPO GMP Sensibly
GMP is no waste of time – only one of many signals. As I see it, I would use it as follows:
- Read the RHP first. The business model, the growth of revenue, profit margins, the debt service, promoter holding and the portion of the issue that is offered-for-sale (OFS) and the portion that is fresh capital.
- Check valuation. Look at the IPO’s P/E/EBITDA ratio and make comparisons to listed peers. A high GMP isn’t an expensive valuation.
- Watch subscription data. Subscription figures (particularly QIB demand) for exchanges are real money – GMP is talk.
- Follow the GMP trend, not one number. A GMP that is declining during the issue period is red flag.
- Be careful when handling SME GMP. Smaller floats are easier to move the quotes for SME.
- Pick a goal and then apply. Is the gain or LTH? You should have your plan for getting out in place before you put your house up for sale.
- Do not deal with grey-market operators. Use only through your broker/ bank, through ASBA/ UPI.
GMP vs Fundamentals: What Actually Drives Long-Term Returns
| Factor | GMP | Fundamentals |
|---|---|---|
| What it reflects | Short-term grey-market sentiment | Business quality and valuation |
| Source | Unofficial dealers | RHP, financial statements, peer data |
| Reliability | Low to moderate | Higher, over time |
| Useful for | Gauging listing-day mood | Deciding whether to hold after listing |
| Regulated? | No | Disclosures regulated by SEBI |
How to Apply for an IPO Using Indian Trading Apps
Most of the brokers do not charge any amount for making an application. The procedures are similar in general:
- Login to the IPO section in your trading app (Zerodha Console/Kite, Groww, Angel One, Upstox, Dhan, Paytm Money and others).
- Select the IPO, put in a number of lots and place a bid at the cut off price (only retail investors can bid at cut off price).
- Enter UPI ID and press submit.
- Ascend the UPI mandate in the UPI application prior to cut-off time on the closing day.
- Allotment funds remain frozen until allotted, verify allotment status on Registrar/exchange website.
- In case allotted, shares are credited to your demat account prior to the listing day.
| App | IPO application charge | Useful feature |
|---|---|---|
| Zerodha | ₹0 | Apply via Console; clean mandate tracking |
| Groww | ₹0 | Simple flow, pre-apply option |
| Angel One | ₹0 | IPO notes and research |
| Upstox | ₹0 | Pre-apply and status alerts |
| Dhan | ₹0 | Pre-apply and quick UPI flow |
Brokerage applies only when you sell allotted shares (delivery brokerage per your broker’s plan) – the application itself is free.
Tax on IPO Listing Gains (FY 2026-27)
- Short-term capital gains taxed at 20% if the purchase and sale of the investment takes place within 12 months (including date of listing).
- If the investment period is more than 12 months, the investor will be subjected to Long Term Capital Gains tax at a rate of 12.5% on the investment period.
- STT 0.1% charged on exchange while selling.
- Grey income: The money generated through Kostak/Sauda transactions is not deemed as Capital gain on listed shares and thus poses tax issues as it is undocumented income.
- Using IPO GMP has its own benefits and drawbacks.There are pros and cons to using IPO GMP.
Pros and Cons of Using IPO GMP
Pros
- A fast overview of the prevailing opinion on the market before listing your stock.
- Supports with understanding expectations for listing day
- A declining GMP may indicate a weakening demand
- Free and well-monitored
Cons
- Uncontrolled, unofficial and prone to manipulation
- Morning error of about 15% or more, on listing, about 1 in 3 times (2024–25 data)
- Do not comment on the quality of a business in the long run.
- Set expectations for herd behaviour and the “listing gain” speculation.
- Grey-market deals have counterparty and legal risk
Expert Insight: My Rules for GMP in 2026
It has been a year of average listing gains in the single digits, so here’s my take. GMP is only to be used as a tie-breaker. A healthy GMP is a mild confirmation if business, valuation and QIB are satisfactory. When the basics seem shaky, no GMP should sway you in the other direction. Don’t apply if you would be unhappy with the stock if you held it for three years if the listing performed poorly.
FAQs about IPO Grey Market Premium
What is IPO grey market premium (GMP)?
IPO grey market premiums are the amount that those who participate in the unofficial market, known as the grey market, are willing to pay for the shares of an IPO over their upper price cap.
How is IPO GMP calculated?
The estimated listing price is the high end of the price range plus the GMP. For instance, if you invested in an IPO for ₹300 with a GMP of ₹60, you can expect to make a 20% profit on the investment.
Is IPO grey market trading legal in India?
As per the definition of the grey market, it is not recognized by SEBI, NSE and BSE, and is not regulated by SEBI. There is an absence of a protection for investors in grey-market deals, and there are no official channels to follow up on an agreement.
What is Kostak rate in IPO?
Kostak is a pre-stipulated sum that the grey-market entity is charged for submitting an entire application for IPO, irrespective of whether or not he/she is allotted.
What is Subject to Sauda in IPO?
The grey market deal, where the dealer pays a fixed price for an IPO application, is a subject to deal. If no allotment, this deal is cancelled.
Does a high GMP guarantee listing gains?
No. Getting a high GMP is not an assurance of listing gains. Some companies in the double-digit GMP range have also listed flat in 2026, while one analysis revealed that GMP was off by over 15% in the listing morning about one-third of the time.
Where can I check IPO GMP today?
IPO GMP is monitored by third party IPO websites as well as financial news sites. These are unofficial and not independent of SEBI and exchanges, check the last updated time.
Why does IPO GMP change so often?
GMP changes with subscription data, overall market mood, news about the company and activity by grey-market dealers. SME IPO GMPs can fluctuate greatly due to the low trading volume.
Is GMP reliable for SME IPOs?
GMP is generally less reliable for SME IPOs because of smaller issue sizes and thin grey-market activity, which make quotes easier to influence.
How should I use IPO GMP before applying?
Use GMP only as a sentiment indicator. Base your decision on the company’s financials, valuation, use of IPO proceeds and exchange subscription data, and apply only through your broker or bank using ASBA or UPI.
Conclusion: IPO Grey Market Premium Is a Signal, Not a Strategy
The IPO grey market premium is the most talked-about number in Indian IPO investing, but 2026 showed its limits. Record fundraising came alongside shrinking listing gains, and several high-GMP issues listed flat.
Use GMP as a quick sentiment check, then do the real work: read the RHP, compare valuation with peers, watch QIB demand and decide in advance whether you’re applying for listing gains or long-term ownership. And keep your money in official channels – your broker and UPI – never with grey-market dealers.
