10.17What is GMP (Grey Market Premium)?
1What is it?
GMP is an unofficial, unregulated price at which some people informally trade IPO shares (or applications) before listing.
2Why does it exist?
People quote it as a "listing gain prediction". But it is not official, not regulated by SEBI and easily manipulated.
3Risks
- GMP can collapse in days.
- There is no legal protection in grey-market deals.
- Never treat GMP as a guaranteed listing gain. Many IPOs with a high GMP listed flat or below the issue price.
4Quick revision
- Unofficial, unregulated.
- Easily manipulated.
- Never a guarantee.
5Knowledge check
Q1. Is GMP regulated by SEBI?Show answer
No.
Q2. Should you apply just because GMP is high?Show answer
No, evaluate the business and valuation.
Q3. Can a high-GMP IPO list at a loss?Show answer
Yes.