Block Deals

What are “Block Deals”?

“A Block Deal is a deal where a minimum quantity of 5 lakh shares or shares with a minimum value of Rs.5 Crore are transacted through a single transaction window of the stock Exchange.”

A Block deal happen through the separate window provided by the stock exchange. This window is open only for 35 minutes. It is different from the bulk deals which take place through out the trading day.

There is always a need for two parties for a block deal to take place however, the bulk deals are market driven. If more than 0.5% of the number of equity shares of a company gets traded in a single or multiple transactions under a single client code, it is called as a Bulk deal.

For Block deals, transaction price of a share ranges from +1% to –1% of the previous days closing price. According to SEBI Guidelines, shares transacted under the window of block deal should not be squared off or reversed.

Major participants in the Block Deals (& Bulk deals) are Mutual Funds, Financial Institutes, Insurance Companies, Banks, Venture Capitalists & FIIs.