Question 1

What is IPO Grey Market Premium (GMP)?

Accepted Answer

IPO Grey Market Premium (GMP) is an unofficial premium over the issue price that investors pay in the unlisted market prior to official listing on NSE/BSE.

Question 2

How is the estimated listing price determined?

Accepted Answer

Estimated Listing Price = Cut-off / Issue Price + Current Grey Market Premium (GMP).

Question 3

What is Kostak rate in an IPO?

Accepted Answer

Kostak rate is the fixed profit made by selling an IPO application before allotment, irrespective of whether the application is allotted shares.

Question 4

What is Subject to Sauda?

Accepted Answer

Subject to Sauda is an agreement where payment is made only if the seller receives share allotment in the IPO.

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