IPO Learning Guide
Kostak rate is a grey market term for the fixed, lump-sum price at which an IPO applicant sells their entire application to another buyer, before allotment is even known. Unlike GMP, which is a per-share premium paid only if shares are allotted, a kostak deal is paid regardless of allotment outcome.
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In grey market slang, a “kostak” deal means selling your IPO application form itself — your right to whatever gets allotted against it — for a flat amount agreed upfront. The buyer pays the seller the kostak rate whether the application gets full allotment, partial allotment, or none at all.
This is fundamentally different from GMP, which only pays out per share actually allotted. Kostak shifts the allotment risk entirely to the buyer.
All three are informal, unregulated grey market arrangements and none of them are recognized or enforceable by any exchange, registrar, or SEBI process.
Kostak deals let an applicant lock in a guaranteed gain (or avoid a loss) before allotment is announced, especially useful when an IPO is heavily oversubscribed and the odds of allotment are low. The buyer, in turn, is betting that the expected value of the application — combining allotment probability and expected listing gain — exceeds the kostak price they’re paying.
IPOCraft does not facilitate, verify, or endorse kostak transactions. This page is informational only, explaining a term investors frequently encounter in IPO discussions.
No. GMP is a per-share premium paid on allotted shares; kostak is a flat amount paid for the entire application regardless of allotment.
Kostak deals are informal grey-market arrangements outside official exchange mechanisms. They carry no regulatory recognition or protection.
Track official-adjacent, publicly discussed GMP data on the IPO GMP tracker.
