Strong IPO gains stoke FOMO fears, set grey market abuzz

Mumbai: The unofficial grey market, where shares are traded ahead of their listing on the main exchanges, is once again abuzz with activity, with prices moving higher following a string of strong listings recently.

Higher grey market premiums-the additional price that investors are willing to pay over the IPO price in the grey market before a stock lists-signal rising expectations of better listing gains for mainboard initial public offerings (IPOs).

For instance, Behari Lal Engineering’s GMP is trading at nearly 44%, or ₹125 a share, above its issue price of ₹285, following 118 times subscription to its IPO. Shiprocket Ltd’s GMP is around 38%, or ₹39 a share, above its issue price of ₹97, after the IPO was subscribed around 99 times. Both stocks are scheduled to list on August 19. Investor appetite in the unregulated grey market has also extended to IPOs that are currently open or yet to be launched.

Lalithaa Jewellery Mart’s GMP is currently around 17% above its issue price of ₹201 a share. The IPO opened on August 17 and is scheduled to close on August 19, with the stock expected to list on August 24. The issue had received over 3x subscription by the end of its second day.

Sunshine Pictures’ GMP is around 21% above its issue price, while Skyways Air Services is commanding a 24%, or ₹33, premium over the upper end of its ₹138 price band. Tempsens Instruments India, whose IPO opens on August 20, has a GMP of around ₹168, or 56%, above its ₹300 issue price.

Brokers and traders said grey market premiums have picked up to a range of 15-25% lately. Unofficial estimates indicated this was an average of 5-6% for the 39 IPOs that listed between January and July, as against 8-10% in 2025, when 103 IPOs were launched and listed.

“The momentum in the grey market is palpable thanks to the strong performance of recent listings, and sets the stage for a robust pipeline, anchored by highly anticipated mega-IPOs like Jio and NSE,” said Manan Doshi, co-founder of Unlisted Arena. August has seen strong listing-day gains so far. Technocraft Ventures and MV Electrosystems jumped 47% each on listing day, followed by Dhoot Transmission and Molbio Diagnostics, which gained 36% and 29%, respectively. Milky Mist Dairy Food rose around 30% on its listing day.”The recent listings provided strong listing gains to investors and are driving fear-of-missing-out (FOMO) among retail and high-net-worth investors,” said Hitesh Dharawat, owner of Mumbai-based Dharawat Securities, which deals in pre-IPO and unlisted stocks. “This is driving high oversubscription in ongoing IPOs.” Around 12 IPOs listed in July delivered average listing gains of around 20%, according to ET calculations. For the 27 stock market debutants between January and June, the average listing-day gains were 9%. This compares with an average listing-day gain of 10% per issue in 2025.

The GMPs of some of the upcoming IPOs, Gaja Alternative Asset Management, Shankesh Jewellers and Horizon Industrial Parks are relatively muted.

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Abhishek Ginodia, director at Altius Investech, said GMP is largely a function of IPO pricing.

“Issues priced expensively earlier this year saw muted GMPs and modest listing gains. Over the last month, though, companies have been pricing more conservatively to drive stronger subscriptions, which in turn has pushed GMPs and listing-day pops.”