GMP, Lot Size & Subscription Status - IPO Terms You Keep Hearing
Three numbers dominate every IPO headline. Here's what each actually means.
Grey Market Premium (GMP)
The unofficial premium buyers are willing to pay over the IPO price, before shares are even listed. A ₹100 IPO with GMP ₹40 suggests a possible ₹140 listing.
It's called "grey" because it's unregulated - traded informally, outside SEBI, NSE, or BSE oversight. No one verifies these numbers, they swing constantly, and plenty of high-GMP IPOs have listed flat or lower. Treat it as background chatter, never a reason to apply.
Lot Size
Unlike regular trading, IPOs don't let you buy single shares - only fixed bundles called lots.
Example: Price band ₹95–₹100, lot size 150 shares → minimum investment ₹14,250–₹15,000. You apply in multiples of one lot, never an arbitrary number.
SEBI keeps lot sizes sized so retail minimum investment stays around ₹10,000–₹15,000. It's published in the prospectus and shown on your broker app.
Subscription Status
How many shares were applied for vs. how many were offered, shown as a multiple (e.g., "45x subscribed").
It's tracked separately for Retail, NII, and QIB categories - often very different numbers in the same IPO. If a category is oversubscribed, retail allotment shifts to a lottery: SEBI's process tries to give at least one lot to as many applicants as possible, so heavy oversubscription (like 45x) means real odds of getting zero shares, not just fewer. High subscription reflects demand, not a guarantee of listing gains.
How They Connect
- Lot size - decides what you can afford to apply for.
- Subscription status - tells you your odds of allotment.
- GMP - pure sentiment, unrelated to whether you'll actually get shares.
Check them in that order: can I afford it → will I likely get allotted → what's the mood (ignore mostly).
The Takeaway
Lot size and subscription status are regulated facts worth understanding before applying. GMP is unregulated sentiment - know what it means, but don't decide based on it.