Reigning U.S. Open champion Retief Goosen and England's Anthony Wall shot matching 67s in the second round at Houghton Golf Club to share third place at 9-under.
Grewal, a 20-year-old who is making only his second start on the European Tour, flew out of the gates on Friday with birdies on his first three holes. He added his second eagle in as many days at the par-5 5th but dropped a shot at the par-3 8th.
He lost another stroke to par around the turn at No. 10 but closed with three birdies and an eagle for his 64, his lowest round in tournament golf.
'This is a massive surprise,' said Grewal, who qualified for the tournament with a 68 on Tuesday. 'My aim was to play nicely and make the cut. I think Ive managed to achieve that part.'
Wessels was close to flawless on Friday, starting on the back nine at Houghton and breaking into red figures early with a birdie at No. 11. He chipped in for eagle at the 16th and birdied the 17th to go out at 32.
'The chip in for eagle at 16 was key,' said Wessels, who missed only two greens in regulation on Friday en route to a 6-under-par 66.
Another possible key for Wessels is the fact that both he and his wife are members of Houghton Golf Club.
'Its nice to be in this position and Im sure the other members are happy as well,' said Wessels, who tied for ninth at last week's U.S. Open champion South African Open. 'Ive been playing decently for a while and it would be nice to do well in my first five events before we reach the European section of the Tour.'
Goosen bogeyed his first hole, the 10th, but made his move up the scoreboard with three birdies in a row around the turn. The U.S. Open champion played in the final group last week at the South African Open but struggled down the stretch with his putting.
'My putting is holding me back,' said Goosen, the 2001 Order of Merit champion. 'I am still struggling to make a decent stroke and getting the ball on line. I would have expected to hole a few more and it could have been a really good round. I feel I am on the edge of starting to play really well.'
Wall is hoping to continue his successful play at Houghton Golf Club. He earned his first European Tour victory here in 2000 and placed fifth last year.
'Maybe I just manage to play the course the right way for me,' said Wall. 'I like holes that need a slight draw and certainly I do feel comfortable when I play here. I like the place and the course and if youre relaxed in that respect, the golf can fall into place.'
Arjun Atwal and Martin Maritz each fired 64s and share fifth with Mark Pilkington and Mark Foster at 8-under-par.
First-round co-leaders Stephen Dodd and Paul McGinley posted one-under 71s on Friday and are part of a logjam at 7-under. Justin Rose, who finished as runner-up to Adam Scott last year, is also in that group tied for ninth.
Two-time U.S. Open champion Ernie Els carded an even-par 72 in the second round and is tied for 31st at 4-under.
The 36-hole cut fell at 1-under 143 and among the notable players who did not qualify for play on the weekend was former soccer player Roy Wegerle. He posted an 80 on Friday and missed the cut by 13.
'I took a bit of a hammering today,' kidded Wegerle.
Full-Field Scores from the Dunhill Championship