What do you mean by 'Subject to sauda ' in IPO Grey market?

Subject to Sauda refers to a type of deal on India's IPO Grey Market.

An investor may sell an IPO Application to a buyer unofficially at a agreed price (Kostak rate) before IPO shares are listed on the stock exchange.

If the deal is referred to as 'Subject To Sauda', the buyer and seller must agree that the deal will only be valid if the seller gets the allotment. The deal is void if the seller does not receive any shares during the IPO process.

A company called XYZ will be launching an IPO at Rs 100 per share. IPO shares are expected to be listed within 15 days. The seller can sell the Retail IPO allocation of Rs 2. lakhs to the buyer for Rs 5000 through 'Subject To Sauda'.

• A seller who gets an allotment will receive Rs 5000.
• Sellers who don't receive an allotment will not be paid.