Market price

What is Gray Market Pricing (GMP)? – News and Calculation

Gray Market Premium or GMP is a premium paid amount at which IPO shares are traded before they are listed on the stock exchange. For example, LIC sets its IPO price at Rs 90 per share and its IPO GMP is 50, then the organization will be listed at Rs 140.90. Eventually, investors will receive up to 55% of the profits on the day of trading.

Simply put, IPO-related companies test the waters of the gray market before debuting on the stock exchange and the GPM acts as a key indicator that reflects IPO performance on the day of listing.