what is kostak rate ? and sauda for ipo s ? please explain in details, is kostak rate same like premium in grey market or different ?
Kostak Rate: It is the amount you sell your application for. For an example, Company A has announced an IPO and their greymarket rate or premium is 100 Rs. and their Kostak rate is 1500 Rs., If you want to sell your application in the greymarket before the allotment then you will get 1500 Rs. for the application. They will pay you 1500 Rs., if you get shares or not they will pay you 1500.
Sauda or Subject to Sauda Deals – Say you have applied for Company A and Subject to sauda deals are running in that partucular IPO and suppose deals are done at 4000 Rs. So, if you do sauda deals in Company A, you will get 4000 Rs, only if you get the shares via allotment. If you are unlucky and you do not get shares in your demat account then you will not get anything.
This is my understanding of Kostak and Sauda for IPOs. I hope you understand the process.