What is Bulk and Block Deal?

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BULK DEAL

A Bulk Deal occurs when a large quantity of shares of a company is bought or sold in a single transaction by a single entity.

BLOCK DEAL

A Block Deal is a transaction involving a significant block of shares, typically meeting predefined quantity or value thresholds set by regulatory bodies.

Parties Involved

• Both Bulk and Block Deals involve the participation of buyers and sellers, often facilitated by brokers.
• These transactions are typically conducted outside the regular market platform to minimize impact on the stock's price.

Quantities for Bulk and Block Deal 

• Bulk Deals typically involves a minimum value of Rs. 5 crores or 0.5% of the total listed shares, whichever is lower.
• Block Deals usually involves a minimum quantity of 5 lakhs shares or a minimum value of Rs. 5 crores, whichever is lower.

Execution

• Brokers play a vital role in executing bulk and block deals, negotiating terms, and ensuring compliance with regulations.
• These transactions are often executed off the regular exchange platform to minimize market impact and facilitate smoother execution.

Reporting

• Bulk and Block Deals must be reported to the relevant Stock Exchange within 15 minutes of execution.

What is Reported

• Reporting includes details such as the names of the buyer and seller, quantity of shares traded, price, and any other relevant information.

Settlement

• After execution, settlement occurs, involving the transfer of shares from the seller's demat account to the buyer's demat account and the transfer of funds.
  

Utilization

• Bulk and Block Deals are used by institutional investors, mutual funds, High Net Worth Individuals, and other entities for large scale trading.  

Importance to Retail Traders

• Bulk and Block Deals data provide valuable insights into Market Sentiment, Institutional Trading Activity, and Potential Price Movement, aiding retails traders in making informed decisions.