![]() As we suggest just refer to the IPO GMP for the listing gain purpose. There might be fluctuations on a higher side so one needs to do it with precautions. If you are trading in the grey market it will be at your own risk. It depends on the broker or the trading person and We suggest it is not safe. Still, this is an assumption but the actual listing might vary from the grey market price. Let’s assume that if the X IPO price is fixed at ₹200 and the grey market is showing the rate of ₹100 it means the IPO might list at ₹300 (ie: ₹200+₹100). The calculation is done based on the company’s performance, its demand in the grey market, and the probability of the subscription. The IPO GMP aka grey market premium is a price that is traded in the grey market before the IPO listing process. Again if one gets an allotment and he or she sold the application for around ₹10000 and the profit goes high on listing day around ₹15000 then one should pay ₹5000 to the guy who bought the application. In this one can not fix their profit as it depends on the allotment. If one buys or sells the IPO application on the subject to sauda it means one can get the said amount if one will get the allotment otherwise sauda will be cancelled. What is Subject to Sauda?Īs per the Kostak rate, the Subject to Sauda on the application is the amount decided when the investors get the firm allotment on their IPO Application. This is the secure way to sell your application in the IPO grey market. Now if he sells the stock and gets a profit of around ₹10000 then he or she needs to give the remaining profit of ₹5000 to the investor who bought the application. If he gets the allotment in 2 applications still his profit will be ₹5000. If one did 5 applications for one IPO and sold the same at ₹1000 per application it means he or she secured the IPO profit at ₹5000 rupees. The Kostak rates apply the investor gets the IPO allotment or not, the buyer should pay the Kostak rates for the IPO. One can buy and sell their full IPO application on Kostak rates outside the market and fix their profit. As the grey market reacts the Kostak rates also react that way. The Kostak rate is the amount that one investor pays to the seller of an IPO application before the IPO listing. We have observed that if the IPO is in demand and the estimated HNI and QIB subscription is on a higher side, the IPO list around the given price with estimated IPO GMP. In most cases, IPO GMP works but in some cases, it’s not. But the fact is, there is no reliability. If the company comes up with an IPO of ₹100 and the grey market premium is around ₹20 then we can assume that the IPO might list at around ₹120 on its listing day. The grey market premium indicates how the IPO might react on a listing day with an estimated price. The grey market works before the IPO listing and during the days from the IPO start date to the allotment date. The grey market is unofficial but investors look at the grey market price of an IPO to get the fixed gain of the stock. The “ grey market premium” aka “ IPO GMP” is a term people use in the IPO market to check what is the estimated price the IPO might list. IPO Grey Market FAQs: What is Grey Market Premium? Past IPO Grey Market Premium of IPO 2021-2022: IPO Name Subscribe only considering the Fundamentals of the companies.Do not subscribe to the IPO on the premium given above.Kostak Rate is the premium one gets by selling his/her IPO application (in an off-market transaction) to someone else even before allotment or listing of the issue.We do not recommend trading in the Grey Market as it’s illegal.The grey market rates are calculated and provided or sourced from the market research or the experts.Read our IPO analysis before applying for an IPO.It depends on the trust between both parties. The grey market transactions are unofficial and that is an involvement of IPO investors and the stockbrokers.Important Points to Consider about IPO GMP: IPO Kostak & Subject to Sauda Rates IPO Name Current IPO GMP RatesĬheck the latest IPO analysis and the estimated grey market rates with listing gain as given below: IPO Name IPO Investors always look at the premium of an IPO before investing in it but it might vary as per the market conditions, demand, and subscription numbers. The grey market starts unofficially in the unregulated market after the IPO date and price band announcements. The grey market premium aka IPO GMP is information that is calculated based on the demand of a company that is coming up with an IPO.
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