IPO GMP is the rate of premium an IPO commands in grey market. In simple terms, this premium indicates the price grey market buyers are willing to pay over and above the allotment price asked by the company. As such, GMP indicates that the offer is likely to list at higher prices and reward successful applicants. On the other hand, IPO grey market discount indicates that the offer is likely to list at lower rates.

The IPO grey market is an informal setup and it operates between IPO start date and listing date. The premium fluctuates daily on the basis of IPO demand and situations in the secondary market. It is observed that GMP goes up with wider markets and similarlly, comes down in subdued conditions.