SEBI last amended the Block Deal rules in October 2017! It’s now time to review and update the existing regulations.
What is Block Deal?
A block deal is a single, large-scale transaction involving the purchase or sale of a significant number of shares in a publicly traded company, arranged in advance and carried out using a specialized platform or window on the stock exchange. This route is typically chosen by institutional participants such as mutual funds, high-net-worth investors, portfolio managers, and foreign institutional investors.
Retail investors frequently mix up block deals and bulk deals, though they are distinct. Bulk deals occur when one transaction exceeds 0.5% of the company’s total listed shares, while block deals require at least 5 lakh shares or a transaction value of ₹10 crore or more in a single trade. Not all block deals meet the criteria to also be classified as bulk deals
| Block Deal | Bulk Deal |
| The minimum transaction size is 5 lakh shares or ₹10 crore in value. | Any transaction exceeding 0.5% of a publicly limited company’s listed shares. |
| Conducted through a specialised window at a specific time of the trading day. | Conducted on the main market throughout the regular trading hours. |
| Price range is limited to +/-1% of last day’s closing price or LTP (last traded price). | The prevailing market price at the time of the transaction. |
| Publicly disclosed immediately after the transaction. | Publicly disclosed at the end of the regular trading hours. |
| Pre-arranged and pre-negotiated. | It may or may not be pre-arranged and pre-negotiated. |
| Does not affect the ongoing market price. | Causes a sharp increase in trading volume and may result in sudden and sharp price fluctuations if not efficiently managed. |
What’s the size of Block Deals in India?
It is estimated that Block deals will hit INR 10 lakh crore (INR 10 trillion) in 2026!. The biggest ones to date are
1. Bajaj Finserv offloaded shares worth ~ INR 5,500 crore.
2. Ant Financial offloaded Eternal shares worth ~ INR 5,400 crore.
3. Ant Financial offloaded Paytm shares worth ~ INR 3,800 crore.
4. Adani Group offloaded Adani Wilmar shares worth ~ INR 3,733 crore.
5. Aptus Valure Housing Finance offloaded shares worth ~ INR 2,060 crore.
6. Yes Bank offloaded shares worth ~ INR 2,022 crore.
Proposed Changes?
The new regulations will be implemented 30 days following the issuance of SEBI’s final circular. SEBI is accepting public feedback on the proposed changes until September 15, 2025, which can be submitted either online or through email.
- According to the draft circular, block deals will be allowed only during two designated trading windows. The first window is in the morning from 8:45 am to 9:00 am, where transactions will occur at the closing price of the previous trading day. The second window is proposed in the afternoon from 2:05 pm to 2:20 pm, with trades executed at the volume-weighted average price (VWAP) calculated based on trades between 1:30 pm and 2:00 pm. The exchanges will compute and announce this reference VWAP price between 2:00 pm and 2:05pm.
- Proposed price limits state that for stocks included in the futures and options (F&O) segment, transactions must occur within 1% of the reference price. For all other stocks, trades should stay within 3% of the reference price, with additional surveillance measures in place.
- The proposed minimum order size for a block deal is set at ₹25 crore. Additionally, every block deal must involve the actual delivery of shares, disallowing any squaring off or reversal of trades.
- Exchanges must disclose the details of block deals—such as the stock name, buyer and seller identities, quantity, and price—after the market closes on the same day.
- Furthermore, stock exchanges, clearing corporations, and depositories are required to enforce the same settlement, trading, and risk management protocols for block deals as they do for regular market transactions.
Are these enough?
Maybe having longer windows, a separate exchange, or allowing the trades to be divided into small ones will lead to a more efficient and effective execution. At least SEBI has taken the initial step towards the right direction! Do feel free to add your opinion on what else can be done
The Enigmatic Pen 