What is GMP and Kostak in IPO?

The GMP is the price an investor is willing to pay over and above the issue price of the IPO on a per share basis and the Kostak rate is a fixed price an investor is ready to pay over and above the IPO application amount for buying the entire IPO application.

The GMP fluctuates depending on the supply and demand for shares, while the Kostak price remains fixed once agreed upon by the buyer and seller.

The buyer must pay the Kostak rate even if the seller of the IPO application does not receive an allotment in an IPO.

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