New Delhi, June 30 -- The grey market in equity trading is in the limelight after retail investors were taken to the cleaners during the mega Rs.12,500-crore initial public offering (IPO) of HDB Financial Services-among the most sought-after. Mint takes a look at this dark corner of Dalal Street.

It's the unofficial market where stocks are bought and sold before they complete the IPO process and are officially listed on exchanges. This market is not regulated by any official body like the Securities and Exchange Board of India (Sebi), and business is done without the involvement of recognized stock exchanges like the NSE or BSE. There is no digital bookkeeping. Transactions are conducted in cash, often with dealers exchanging small slips...