The Kostak rates are the amount in which one pays for the IPO application before the IPO listing. As the grey market reacts the Kostak rates also react that way. One can buy and sell their full IPO application on Kostak rates our side the market and fix their profit. The Kostak rates apply in each condition if you get the allotment or not one should pay the Kostak rates for the IPO. If one did 5 applications for one IPO and sold the same at Rs.2500 per application it means he or she secured the IPO profit at 12500 rupees. If he gets the allotment in 2 application still his profit will be the same. Now if he sells the stock which he got and gets the profit around 25000 then he or she needs to give the remaining profit to the guy who bought the application.