IMPACT OF GREY MARKET PREMIUM ON LISTING PRICE OF IPO

Abstract

Grey Market Premium signifies market sentiment and anticipated demand for an IPO prior to its listing. Despite GMP's common use as an IPO performance predictor, its accuracy needs empirical validation. The objectives of the study are to study the impact of GMP on the listing prices of IPO and the factors that are considered by the investors in selection IPO. Primary data is collected from 400 investors using convenance sampling method. The findings revealed that higher GMPs are generally associated with higher listing prices, making GMP a valuable predictor for investment strategies. From analysis it is confirmed that a significant dependency between subscription levels and GMP, indicating that higher subscription levels result in higher GMPs, reflecting strong market demand and sentiment. Retail investors play critical role in influencing GMP.  with higher retail subscription levels leading to higher GMPs.