Mumbai: The unofficial grey market for initial public offerings (IPOs) is buzzing with activity once again as a flurry of public issuances and improvement in investor sentiment have revived speculators' interest in soon-to-be-listed shares.Grey market premiums (GMPs) - the additional price investors are willing to pay over the IPO price in the grey market before the stock lists on the exchanges - of five IPOs are trading at 8-44% above the issue prices, according to sources. A higher premium indicates the market sentiment for the IPO in question. GMPs of IPOs with robust demand tend to be high, which implies a potential upside in the stock on listing."The sharp rebound in grey market premiums is driven by strong listings of recent IPOs and a new wave of investors focused solely on IPOs to capitalise on quick gains," said Narottam Dharawat of Mumbai-based Dharawat Securities.The ₹840-crore IPO of investment bank DAM Capital Advisors is currently commanding a grey market premium of ₹120, or 42% more than its upper price band of ₹283 per share. The ₹839 crore IPO of Transrail Lighting has a grey market premium of 30% over its issue price of ₹432 per share. Mamata Machinery, a smaller public issue, is trading at a 45% premium in the grey market over its issue price of ₹243 per share.The grey market activity in the primary market had subsided following the sell-off in the market starting late September. Money managers said the BJP-led coalition's victory in the Maharashtra elections has stabilized the market.116453664"The win of the Mahayuti government in the Maharashtra is seen as a reinforcement of the central government's economic policies, instilling renewed confidence among market participants which has led to heightened interest in the capital market and increased activity in the IPO market," said Manish Bhandari, CEO, Vallum Capital.In the recent past, IPOs with higher premiums in the grey market have tended to do well. One Mobikwik Systems, which was trading at a grey market premium of 60%, debuted with a 90% premium over its issue price on Wednesday. Vishal Mega Mart, which had a grey market premium of 26%, listed at a 44% premium, while Sai Life Sciences, despite a grey market premium of 13%, listed 40% above its issue price.Brokers said the subdued grey market activity in November contributed to a tepid investor appetite for some IPOs. Ten IPOs launched between October 25 and December 3 saw single-digit subscriptions, while five IPOs launched after the Maharashtra state election results were subscribed by an average of 50 times. To buy shares of an IPO in the grey market, buyers approach grey market brokers and offer to buy at a premium. Brokers then approach potential sellers, who had applied in the IPO. No physical transfer of shares takes place in the grey market. Once the shares are allocated to the seller, he would transfer the shares to the buyers through the brokers. These transactions are settled through cash. All transactions are settled at the listing price and if there is a difference in the listing price and the previous quoted price, then the difference is settled on listing day.