Every big IPO brings a flood of "GMP today" searches. GMP numbers are quoted everywhere, but they come from an unofficial market with no regulator. Here is what GMP means, how to use it sensibly, and where it goes wrong.
Key takeaway: GMP (grey market premium) is the extra amount over the issue price that informal dealers pay for IPO shares before listing. Expected listing price ≈ issue price + GMP. It is not regulated by SEBI or the exchanges, changes by the hour, and is not a guarantee.
GMP in one formula
| Item | Jio Platforms example |
|---|---|
| Upper price band | ₹1,119 |
| Reported GMP (20 Oct 2026) | ₹245 |
| Implied listing price | ₹1,119 + ₹245 = ₹1,364 |
| Implied listing gain | ₹245 ÷ ₹1,119 ≈ 21.9% |
| On one lot of 12 shares | ≈ ₹2,940 before tax and charges |
The GMP figure is as reported in the media on that date. It is unofficial and can be very different by listing day.
The grey market terms you will see
| Term | What it means | Who carries the risk |
|---|---|---|
| GMP | Premium per share over the issue price | Buyer, until listing |
| Kostak | Fixed price paid for a whole IPO application, allotted or not | Buyer of the application |
| Subject-to-Sauda (STS) | Price paid for an application only if shares are allotted | Shared; usually priced higher than Kostak |
Why GMP can mislead
- No regulator: SEBI, NSE and BSE do not recognise grey-market deals. There is no legal recourse if a dealer does not pay.
- Thin and easy to move: a few dealers can push GMP up or down, especially for small and SME IPOs.
- Market mood changes: GMP fell sharply for many issues this week as Sensex and Nifty slid and the Nifty IPO index dropped about 7.5%.
- Ignores lot luck: high GMP means nothing if you do not get allotment — retail allotment is by lottery when oversubscribed.
How to use GMP sensibly
- Read the company's offer document (RHP) first: business, debt, valuation, use of money.
- Use GMP only as a mood indicator, alongside subscription numbers (especially QIB demand).
- Never sell your application in the grey market — it is informal and unenforceable.
- Decide your listing-day plan in advance and remember short-term gains are taxed at 20%.
- Invest only money your business does not need in the next 6–12 months.
Check your investable surplus in DAM
DAM does not track IPOs or shares. Before you invest business money, search Profit & Loss to see what the business actually earned, and Day Book to see cash and bank balances.
Know your surplus before you invest
Profit & Loss and cash in hand from your daily books — so you invest only what the business can spare.
Frequently Asked Questions
What is GMP in an IPO?
Grey market premium: the unofficial premium over the issue price at which IPO shares are traded informally before listing.
Is GMP legal?
Grey-market trading is not authorised or regulated by SEBI or the exchanges, and deals have no legal protection.
How do I calculate expected listing price from GMP?
Issue price + GMP. For Jio at ₹1,119 with a reported GMP of ₹245, that is about ₹1,364.
Is a high GMP a guarantee of listing gains?
No. GMP changes quickly and can turn negative before listing.
Sources
Content checked on 25 October 2026. 5paisa: What is IPO GMP · Sahi: grey market premium explained · Free Press Journal: Jio Platforms IPO and GMP · SEBI investor website.
Disclaimer: This guide is for educational purposes only and does not constitute formal tax, legal or financial advice. This is not investment advice. Verify with a registered Chartered Accountant (CA) before acting.