How Accurate Is IPO GMP? We Checked Every Listing Against Reality

Everyone quotes the grey market premium before an IPO. Almost nobody checks it afterwards. So we did.

For every IPO we track, we record the GMP through the bidding window. Once the stock lists, we now capture the actual listing-day price. That lets us ask the question the number is really making a claim about: when GMP said an IPO would list X% up, how far up did it actually go?

Here is what our data shows so far. It is a live study — the sample grows every time another IPO lists — but even at this size the pattern is striking, and it is not the one most people assume.

How we measured it

For each listed IPO we compare two numbers:

• What GMP implied — the last grey market premium before listing, as a percentage of the issue price. A ₹60 GMP on a ₹400 issue implies a +15% listing.
• What actually happened — the real listing-day open, as a percentage gain over the issue price.

Both come from our own tracking: GMP recorded live through bidding, listing prices captured on debut. No estimates, no hindsight.

Finding 1: GMP almost always gets the direction right

Across every issue in the sample, the last GMP correctly signalled whether the stock would list at a premium or at a discount — bar one issue that GMP called flat and that listed flat. As a yes/no "will this list up?" indicator, GMP earned its reputation.

That is the part GMP does well, and it is genuinely useful: a strongly positive GMP has been a dependable sign that an issue will not list underwater.

Finding 2: on the actual number, mainboard and SME are different worlds

This is where it gets interesting. When we measure how far the real listing gain landed from what GMP implied, the two segments barely look like the same indicator.

Mainboard IPOs — GMP was remarkably accurate:

Median miss: 2.8 percentage points. For an unofficial, dealer-quoted number, landing that close to a real listing price is genuinely impressive.

SME IPOs — GMP was all over the place:

Median miss: 20.2 percentage points — over seven times worse than mainboard, and it misses in both directions.

Why the split makes sense

It is not random. The SME grey market is far thinner — a handful of trades can set the quote — so it is much easier to move and much noisier. The mainboard grey market is deeper and has real institutional demand behind it by listing day, which anchors the number closer to reality.

Notice the failure modes differ, too:

• The hottest issues overshot. Millworks implied a +119% pop and delivered +90% — still huge, but 29 points short. High-hype grey markets run ahead of themselves.
• Some quiet SME issues undershot badly. IC Electricals and Devson Catalyst each listed more than 20 points above what GMP implied. On a thin SME counter, GMP can miss demand entirely.

What this means before you apply

• Use GMP for direction, not for the number — especially on SME. "Will this list up?" is a question GMP answers well. "Exactly how much?" is one it answers well only for mainboard.
• Distrust extreme SME premiums most. The biggest premiums were the biggest misses. A +100% SME GMP is a statement about hype, and hype is exactly what fades between the last quote and the opening bell.
• On a large mainboard issue, GMP is a reasonable rough guide — but it is still a sentiment reading that can move with the market on listing day, not a guarantee.

If you want the mechanics behind the number, our guide to what GMP actually is covers where it comes from and why it moves.

The honest caveats

This is a small, live sample — a handful of mainboard and SME listings, growing every time another IPO debuts. The direction of the finding (mainboard tight, SME loose) is consistent and has a clear mechanical reason, but the exact medians will shift as the dataset grows. We update this study as new listings come in rather than freezing a single snapshot.

We also measure against the listing-day open. An issue can drift far from there in the days after — GMP was never trying to predict that, and neither are we here.

The short version: grey market premium is a good compass and a poor ruler. It reliably tells you which way an IPO will list. How far — trust it on the mainboard, and take it with a very large pinch of salt on SME.

Nothing here is investment advice. Grey market premium is an unofficial, unregulated indicator and we are not SEBI-registered analysts. This analysis uses our own tracked data, compares against the listing-day open, and is updated as more IPOs list. Past patterns do not predict future listings.