The Grey Market Premium, or GMP, is the price of shares on the grey market. This rate is a premium paid for the shares in advance of the IPO’s listing on the official exchange. The IPO GMP may be positive or negative depending on demand, and is a premium tacked on to the price of each share. This tells us the average price that investors are willing to pay for IPOs.
The Ultimate Guide To Check Latest IPO GMP
Grey market premium is calculated in terms of percentage, which indicates whether the IPO has attracted enough investors to justify its listing price. A high GMP implies that investors are ready to pay a premium of at least 10% above the IPO’s issue price. A low premium means that investors are not willing to pay a premium at all. A negative GMP is a good sign that investors aren’t confident that the IPO’s price will reach its full potential.
The Grey Market Premium or GMP is the premium that investors are prepared to pay when an IPO is listed. It is the difference between the IPO price and the listing price. The IPO GMP is estimated on the basis of Market momentum and assumptions that the IPO’s price will rise. In other words, if an IPO were priced at Rs. 100 per share, and the listing price is at Rs. 105, then the GMP would be five times higher. However, since the IPO is relatively new, the premium is expected to come down significantly.