Block and bulk deals are large transactions that are executed on stock exchanges. While block deals happen through a special trading window on the exchange that is not visible to all, bulk deals are done as part of the normal trading and can be seen by everyone.
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Block deal vs bulk deal
Block deal is a single trade where a minimum of 5 lakh shares are transacted or the total transaction value is at least Rs 10 crore. Bulk deal occurs when a transaction involves more than 0.5% of a company’s total equity shares.
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Large investors are the participants in bulk and block trades. They can be company promoters, HNIs and institutional investors like mutual funds, hedge funds, foreign funds and private equity firms, can be the participants.
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Why trade through block deals?
Block deals offer exclusivity, efficiency and privacy for big trades since they are done through a special window, which helps in smooth execution of big trades.
They are more tax efficient than off market transactions.
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Bulk deal/block deal timings
Block deals are executed through a special trading window called the block deal window, which operates from 8:45 am to 9:00 am in the morning and from 2:05 pm to 2:20 pm in the afternoon. Bulk deals are carried out during regular trading hours, from 9:15 am to 3:30 pm.
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Impact on stock prices
Block deals occur in separate trading windows so they do not affect the stock price in real time. They are executed at a predetermined price. Bulk deal transactions happen during regular trading hours, affecting the stock price in real time. Their impact in stock prices is smaller compared to block deals.
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For a block deal to be executed, both the buy and sell orders must have the same quantity and price. Once an order is placed in the block deal window, it remains active for only 90 seconds. In bulk deals matching and execution happen real-time based on the prevailing market prices.
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Where to find block and bulk deal details?
Deals executed on the BSE can be viewed under the equity section of markets. NSE publishes both block and bulk deals data in the daily markets reports section of market data/trade information/get markets data.
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