New Delhi: Before listing in the stock market, the company launches its IPO for investors. There is a lot of craze about Bajaj Housing Finance's IPO in the market right now. Today is the last day to bid in Bajaj Finance's IPO. Let us tell you that in the last two trading sessions, the company's IPO has received a very good response from investors.

In such a situation, now there is a discussion about the listing of the company's shares on the Grey Market Premium. Yes, whenever there is a discussion about IPO, then GMP i.e. Grey Market Premium is also mentioned. In such a situation, before knowing about Bajaj Housing Finance's GMP, we should understand the connection between IPO and GMP.

What is Grey Market?

The grey market is a kind of stock market. However, it is quite different from the main stock exchange. In this, shares are traded before their listing. Whatever trading takes place in the grey market is personal, that is, it is outside the rules of the market. But, its trading is also not considered illegal.

The entire business of the grey market runs on trust. How will the listing of any IPO be? This is estimated on the basis of the performance of the IPO in the grey market. At what price the IPO is available in the grey market and how many buyers there are, after all this the company estimates how the listing of the IPO will be.

What is Grey Market Premium?

When the grey market is discussed, its premium i.e. Grey Market Premium is also mentioned. Actually, there are many such shares in the market which are expected to be listed with a premium. In such a situation, the grey market is ready to pay more than the IPO price even before the listing of the share. The amount paid more than the IPO is called the grey market premium.

Understand it like this, if the issue price of an IPO is Rs 500 but in the grey market it is trading at Rs 520, then the additional Rs 20 is the grey market premium.

How accurate is the grey market premium?

The grey market never gives accurate information about the listing of the stock. From GMP, we can only guess how the listing of the stock will be. In such a situation, one should not completely trust GMP. In such a situation, if you are thinking of investing in an IPO, then you should not rely only on GMP. First do your own research or consult a trusted financial advisor or market expert and then invest.

Bajaj Housing Finance GMP

There is an indication of earnings for Bajaj Housing Finance in the grey market. Currently, the GMP in the grey market is Rs 65. This means that if the IPO is listed as per the GMP, then the stock price can be Rs 135 per share. This means that as soon as the IPO is listed, investors will get a profit of more than 92 percent.