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What is the Grey Market Premium ? September 20 2021What is Grey Market Premium, How does Grey Market

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What is the Grey Market Premium?

Grey Market Premium

A company's stock is bought and sold outside of formal trading channels on the grey market, also known as the parallel market. It's an illegal market where shares are traded long before they're available for purchase.

Grey markets have been around for a long time, and many traders and investors believe in them. This is due to the fact that it allows regular investors and traders to purchase or sell shares even before they are listed, if they believe the stock will rise or fall in value.

Does it really matter if it's illegal?

The premium at which IPO shares are exchanged in the grey market is known as the IPO grey market premium (GMP). According to retail investors, GMP is a very good determinant of whether an IPO will do well or not.

What is Kostak rate?

The Kostak rate is the price at which you can sell an IPO application for a predetermined price, regardless of whether you gain allocation or not.

The GMP determines the degree of interest in an IPO among investors. Without a doubt, there is no guarantee that the GMP will accurately predict the listing price. However, it is one of the tools to check before investing in an IPO.

Many IPOs, such as Zomato and Burger King, have recently had GMPs of 50-70 percent, and the same kind of gains were seen on listing day.

Where is it located? Do they have any official Mail ID? 

Grey market doesn’t have any of these. Trading is done via word of mouth. It works in the same way that the 'dabba market' does. There is no stock exchange. Nothing exists in black and white. Everything is kept under wraps.

How does Grey Market work?

Individuals select their own buyers and sellers on a personal basis. The GMP represents how the IPO might perform on the day of its public offering. The GMP will be lower if the number of shares up for sale is less than the number of subscriptions and greater if the opposite way around. It's essentially a supply-and-demand game.

How do you make money there?

You can make money in the grey market in two ways: by purchasing and selling IPO shares before they are posted on the stock exchange, or by selling your IPO application for a set price.

It permits people to purchase IPO shares even if they miss the application deadline or desire to purchase more than the permitted number of shares.

Indira securities provides the best demat account facilities across Central India. It facilitates the users with best trading experience. Whether you want to invest in Stocks, Mutual Funds, Commodities or Bullion market, Indira securities is one-stop brokerage firm for all trading and investment needs.

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Prevent Unauthorized Transactions in your demat and trading account --> Update your Mobile Number/Email id with your Depository Participant and Stock Broker. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat/trading account directly from CDSL and Stock Exchanges on the same day.........issued in the interest of investors...

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.

2. Update your Mobile Number & Email Id with your Stock Broker/ Depository Participant and receive OTP directly from Depository on your Email Id and/ or Mobile Number to create pledge.

3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued by NSE vide. Circular No. NSE/INSP/45191 dated: July 31, 2020 and NSE/INSP/45534 and BSE vide Notice No. 20200731-7, dated: July 31, 2020 and 20200831- 45 dated: August 31, 2020 and dated: August 31, 2020 and other guidelines issued from time to time in this regard.

5. Check your Securities/ MF/ Bonds in the Consolidated Account Statement issued by NSDL/ CDSL every month.


  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to ₹ 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost

Dear Investor,
As you are aware, under the rapidly evolving dynamics of financial markets, it is crucial for investors to remain updated and well-informed about various aspects of investing in securities market. In this connection, please find a link to the BSE Investor Protection Fund website where you will find some useful educative material in the form of text and videos, so as to become an informed investor.
We believe that an educated investor is a protected investor !!!

"As per the directives of CDSL and esteemed Exchanges, it has been made mandatory for every client to furnish their latest KYC details viz. Valid Mobile No., Email- Id & Income range on or before 31.05.2021 else your Account will be marked as Non Compliant and will be Freezed till the compliance of such requirement."
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"KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary."
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