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What is the Grey Market and GMP?
Grey Market:
The Grey Market refers to an unofficial market where the trading of shares occurs before they are officially listed on the stock exchange. It typically happens for Pre-IPO (Initial Public Offering) shares, where people buy and sell these shares before the company goes public.
Key Points:
- Unofficial Market: No regulatory authority governs these transactions.
- Cash Transactions: All deals in the Grey Market are done in cash.
- No Official Contracts: There are no formal agreements or contracts; deals are often done on small slips of paper.
- Trust-based: Transactions happen through word of mouth and trust, with no official dealers.
GMP (Grey Market Premium):
GMP refers to the premium per share in the Grey Market. It is the extra price buyers are willing to pay over the issue price of an IPO share, indicating how much people expect the stock price to rise once it is listed on the stock exchange.
Key Points:
- Premium Per Share: This is the price above the IPO issue price that buyers are willing to pay in the Grey Market.
- Higher GMP = Higher Expectations: A higher GMP suggests a higher expectation that the IPO will be listed at a strong or "bumper" price on the stock exchange.
current IPO GMP details: IPO Status Price GMP Est Listing Fire Rating IPO Size Lot Open Close BoA Dt Listing GMP Updated Avanse Financial Services IPO Upcoming -- -- 🔥 ₹3500.00 Cr TBD 10-Mar 5:55 Arisinfra Solutions IPO Upcoming NA -- 🔥 2.86 Cr Shares TBD 10-Mar 5:55 Divine Hira Jewellers NSE SME Upcoming 90 -- 🔥 ₹31.84 Cr 1,600 17-Mar 19-Mar 20-Mar 24-Mar 10-Mar 10:29 Paradeep Parivahan BSE SME Upcoming 98 -- 98 (0%) 🔥 ₹44.86 Cr 1,200 17-Mar 19-Mar 20-Mar 24-Mar 10-Mar 20:02 Super Iron Foundry IPO BSE SME Upcoming 108 -- 108 (0%) 🔥 ₹68.05 Cr 1,200 11-Mar 13-Mar 17-Mar 19-Mar 10-Mar 19:54 PDP Shipping & Projects BSE SME Open (Sub:0.24x) 135 -- 135 (0%) 🔥 ₹12.65 Cr 1,000 10-Mar 12-Mar 13-Mar 18-Mar 10-Mar 20:01 NAPS Global India BSE SME Close (Sub:1.19x) 90 -- 90 (0%) 🔥 ₹11.88 Cr 1,600 4-Mar 6-Mar 7-Mar 11-Mar 10-Mar 19:55 Balaji Phosphates NSE SME L@75.00 (7.14%) (Sub:1.21x) 70 -- 🔥 ₹50.11 Cr 2,000 28-Feb 4-Mar 5-Mar 7-Mar
Kostak:
Kostak refers to the premium paid per application. When applying for an IPO, some investors might sell their application in the Grey Market before the allotment, and the price they sell the application for is the Kostak premium.
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Why Are IPOs on Hold?
The stock market has been experiencing significant volatility, and no company wants to launch an IPO during uncertain times. When markets fall, negative news spreads, further impacting investor sentiment. Several factors contribute to this IPO slowdown:
- Market Uncertainty: Global and domestic factors, such as geopolitical tensions and economic policies, create an environment of fear.
- Secondary Market Decline: Many listed stocks are already seeing a free fall, making it an unattractive time for new listings.
- Poor Listing Performance: Recent SME IPOs have faced heavy discounts upon listing, indicating weak market sentiment.
For a successful IPO launch, companies need a stable market where retail and institutional investors have confidence. Until that happens, we may not see many new IPOs.
When Will IPOs Resume?
It’s not necessary for the market to make a full recovery before IPOs return. Companies are mainly waiting for stability—meaning the market should stop falling aggressively. Even a sideways trend for a few weeks can restore investor confidence.
Many companies have postponed their IPOs and are closely monitoring the market. The moment investor sentiment turns positive, the IPO floodgates could open again.
Upcoming IPOs to Watch
While no official dates are set, some of the most awaited IPOs in the pipeline include:
- NSDA IPO – One of the most talked-about upcoming IPOs.
- ATV Financials IPO – Expected to gain significant attention.
- TA Capital IPO – Another major IPO that could attract investors.
Apart from these, several other companies are waiting for the right moment to launch their IPOs. Once a big IPO enters the market, it could also encourage retail investors to return, boosting market activity.
What Should Investors Do in the Meantime?
If you have extra cash set aside just for IPOs, you might want to rethink your strategy. Here’s why:
- IPO Timing is Uncertain – There’s no guarantee when new IPOs will come.
- Allotment is Not Guaranteed – Even when IPOs arrive, getting an allotment is never certain.
- Secondary Market Opportunities – Many well-established companies are currently trading below their all-time highs, providing good investment opportunities.
Instead of waiting for IPOs, investors can explore fundamentally strong businesses available at lower prices in the secondary market. However, always assess your risk appetite before making any investment decisions.
