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Market Intelligence › Basic Terminologies
Where GMP comes from, what it does not tell you, and the cost of trusting it
Published by The Retail Trader · AUG 09, 2026 · Market Basics
With every IPO a number goes around called GMP, and many people apply for or avoid an issue on the basis of it. Behind that number there is no exchange, no regulator and no verifiable data.
GMP is an indication from an unofficial, unregulated over-the-counter market where deals are made before listing. It has no central record, and only a handful of people give quotes.
This is why two different sources on the same day can show two different GMPs, and nobody has any way to verify either.
About GMP, these points are facts, not opinion:
• It is not enforceable — there is no contract and no settlement guarantee.
• It is formed from very thin demand, so it is cheap to move.
• The actual price on listing day can go far from GMP, in either direction.
• Taking leverage on the basis of GMP is borrowing against a guess.
If an issue looks good only when the GMP is high, then the decision is not about the issue — it is about a rumour. The prospectus, the financials and the valuation will all stay the same after listing too.
This article is for education only — it is not a buy or sell recommendation, makes no claim of guaranteed returns, and is not advisory. Rules, rates and mechanics change from time to time with the exchange, SEBI and RBI, so verify every number yourself with your broker or an official source.