what is gmp in ipo

GMP in IPO stands for Grey Market Premium. It refers to the premium amount paid at which initial public offering (IPO) shares are traded before they are listed on the stock exchanges. The GMP is the difference between the price at which shares are traded in the grey market and the issue price set by the company. It is a key indicator used to determine the demand and price of an IPO before it is officially listed on a stock exchange. The GMP is calculated by subtracting the issue price from the grey market price, and it can be expressed as a percentage by dividing the GMP by the issue price and multiplying by 100. The GMP is influenced by factors such as demand and supply, valuation of the company, and market sentiment. It is important to note that the grey market operates independently of the official stock exchange and is not regulated