Explanation of Grey Market and GMP in simple terms:
Grey Market is an unofficial market for the Pre IPO.
GMP is the premium per share.
Kostak is the premium per application.
Sub2 or Sub2Sauda is the premium for the allotted application.
As GMP is unofficial, thus there are no regulatory bodies (rules and regulations) involved.
All transaction for GMP is done in cash.
There is no written communication for Grey Market. Small slips of paper is the contract.
There is no official dealer. All buying and selling is through word of mouth and trust only.
The higher GMP means a higher possibility of IPO getting listed at a bumper price.
Fire Rating of a IPO is the measure of how popular is the IPO in terms of expected return.
GMP activity can start before the price band announcement.
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