The 'dabba' market

The grey market or the “dabba” market, as it is popularly called is fascinating. As a company announces its IPO (book-building) dates, players in the grey market try to put a price on the shares of the company. They try to speculate market response, size of the issue and fix a premium on the shares.

This market is interesting for many reasons. It’s illegal – plain and simple. However, speculators and investors have been doing it for a long time. The grey market premiums themselves are quoted in almost every financial daily and broking firms, worth their salt. Many times these markets also decide the fate of listing gains.

There are many other interesting facets to this market... How do these dabba operators ensure actual delivery right under the nose of the regulator? Many time unscrupulous promoters use this market to fool gullible investors.. And sometimes this market is also used to infuse liquidity into the secondary market...

If you come across any article or news which is related to this, please let me know... i am undertaking some academic stuff on this...