Grey market premium

An unofficial, unregulated price at which applications or shares in a forthcoming Indian public offer change hands before listing.

A ₹120 premium on a ₹950 issue implies a listing near ₹1,070.

The market has no legal standing, no settlement guarantee and no published volume, so the quoted premium can be moved by a small number of trades. It is a sentiment indicator with a wide error, frequently reported as though it were a forecast.

It tells you nothing about whether the business is worth owning in three years, which is the only question that matters for a long-term holder.

Use it to understand the first day. Nothing more.