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Grey Market Premium (GMP)
The grey market is an informal, unregulated market where IPO shares are traded before listing. The grey market premium is the price above the issue price at which they change hands there. It is not official and can be manipulated.
Why It Matters
GMP is gossip with a number attached. Treat it with suspicion.
In India
IPOs with high GMPs sometimes list flat or below issue price when real trading begins.
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