The grey market is an unofficial, unregulated secondary market where shares of a company that has filed for an IPO are informally bought and sold before the shares are officially listed on a stock exchange. Since no shares have been issued yet, trades in the grey market are based on informal agreements and carry no legal enforceability or regulatory protection. The grey market operates entirely outside SEBI's regulatory framework. Despite this, it is widely followed in India as a real-time sentiment gauge for upcoming IPOs active grey market trading indicates strong investor demand for the issue, while thin or absent grey market activity may signal tepid interest.
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