Kostak and Subject to Sauda in IPO: Meaning Explained
IPO guide
By IPO GMP Status desk · Updated 31 October 2026 · How we compile these figures
Kostak and Subject to Sauda are two grey market prices for a whole IPO application rather than for a share. They are quoted alongside the GMP, mostly in Gujarat and Maharashtra, and are often confused with each other.
Kostak: a fixed price for the application
Kostak is a fixed amount a buyer pays the applicant for their IPO application, whether or not it is allotted. If the Kostak rate is ₹500, the applicant gets ₹500 even if no shares are allotted; if shares are allotted, the buyer takes the profit or loss from them.
Subject to Sauda: paid only if allotted
Subject to Sauda is an amount paid only if the application gets an allotment. If nothing is allotted, nothing is paid. Because the buyer pays only on allotment, the Subject to Sauda rate is usually much higher than the Kostak rate for the same IPO.
How they differ from GMP
| GMP | Kostak | Subject to Sauda | |
|---|---|---|---|
| Quoted for | One share | One application | One application |
| Paid when | — | Always | Only if allotted |
| Tells you | Expected listing price | Value of applying | Value of an allotment |
The live GMP for each IPO is on the GMP board, and where a Subject to Sauda figure is known it is on the IPO's own page.
The risks
These deals are informal agreements outside the exchanges. There is no regulator, no guarantee that the other side pays, and the applicant's PAN and account details are involved. SEBI does not recognise the grey market, and this site does not deal in it or recommend it.
Frequently asked questions
What is Kostak in IPO?
Kostak is a fixed price paid for an IPO application in the grey market, whether or not the application gets an allotment.
What is Subject to Sauda?
Subject to Sauda is a price for an IPO application that is paid only if the application gets an allotment.
Why is Subject to Sauda higher than Kostak?
Because it is paid only when shares are allotted, so the buyer takes no risk on applications that get nothing.
Is Kostak trading legal?
It happens in the unofficial grey market, which SEBI does not regulate or recognise. It carries counterparty and other risks.
More IPO guides
- What Is IPO GMP? Grey Market Premium ExplainedIPO GMP (grey market premium) explained in plain words: what it is, how it is quoted, how to read the expected listing price, and why it is only an estimate.
- How to Check IPO Allotment Status for Multiple PAN CardsApplied for an IPO from several family members' PANs? Check the allotment status of every PAN together in one tap instead of one by one on the registrar's site.
- How IPO Allotment Works: The Retail Lottery ExplainedHow shares are allotted in an IPO: the retail lottery, small and big NII, QIBs, the T+3 timeline, and what decides your chance of getting an allotment.
- SME IPO vs Mainboard IPO: What Is the Difference?SME and mainboard IPOs compared: where they list, issue size, lot size and minimum investment, liquidity and risk — what to know before applying.
- How to Apply for an IPO with UPI: Step by StepApply for an IPO with UPI through your broker app: placing the bid, approving the UPI mandate, cut-off times, the ₹5 lakh UPI limit and what happens after.
Nothing here is investment advice; see the disclaimer.