Bulk and Block Deals in the Stock Market

In the stock market, Bulk Deals and Block Deals are special types of transactions that involve the buying or selling of a large quantity of shares in a single trade. These deals are executed differently from regular trades and have specific rules set by stock exchanges like NSE (National Stock Exchange) and BSE (Bombay Stock Exchange).

1. What is a Bulk Deal?

A Bulk Deal refers to a transaction where a large number of shares of a particular company are bought or sold, but the quantity is below the threshold of a Block Deal.

Key Features of Bulk Deals:

• Minimum Quantity: There is no fixed threshold, but typically, it involves a significant volume (e.g., 0.5% or more of a company's total shares).
• Disclosure Requirement: Stock exchanges publicly disclose bulk deals at the end of the trading day.
• No Special Window: Bulk deals are executed in the normal market like regular trades.
• Purpose: Often used by High Net Worth Individuals (HNIs), Mutual Funds, or Foreign Institutional Investors (FIIs) to accumulate or offload shares without triggering sharp price movements.

Example of a Bulk Deal:
If an investor buys 5 lakh shares of Reliance Industries (which is a large quantity but not enough to qualify as a block deal), it will be reported as a bulk deal at the end of the day.

2. What is a Block Deal?

A Block Deal is a large, single transaction where a pre-defined minimum quantity of shares is traded at a fixed price through a separate trading window provided by the stock exchange.

Key Features of Block Deals:

• Minimum Quantity: In India, a block deal must involve a minimum of 5 lakh shares or a trade value of ₹5 crore or more (whichever is lower).
• Special Trading Window: Executed in a separate Block Deal Window (usually open for 15-30 minutes at the start of the trading day).
• Price Fixation: The trade happens at a fixed price (usually the previous day's closing price or a negotiated price between buyer and seller).
• Disclosure: Details of block deals are disclosed by the exchange immediately after execution.
• Purpose: Used by large investors, promoters, or institutional players to buy/sell big chunks of shares without affecting the market price.

Example of a Block Deal:
If a mutual fund sells 10 lakh shares of TCS worth ₹50 crore in a single trade at a fixed price, it will be executed as a block deal and reported by the exchange.

3. Difference Between Bulk Deal and Block Deal

4. Why Are Bulk and Block Deals Important?

• Prevents Market Volatility: Large trades in normal markets can cause sudden price swings. Bulk/block deals help avoid this.
• Transparency: Exchanges disclose these trades, ensuring fair market practices.
• Institutional Trading: Big players (like mutual funds, FIIs) use these to enter/exit positions smoothly.
• Price Efficiency: Helps in better price discovery for large transactions.

5. How to Track Bulk and Block Deals?

Stock exchanges (NSE/BSE) publish bulk and block deal data daily on their websites. Financial news portals like Moneycontrol, Economic Times, and BloombergQuint also report these deals.

Where to Check?
NSE Website: https://www.nseindia.com/ → Reports → Bulk & Block Deals
BSE Website: https://www.bseindia.com/ → Market Activity → Bulk Deals/Block Deals

6. Conclusion

Bulk Deals = Large trades executed in the normal market (disclosed later).

Block Deals = Very large trades executed in a special window (disclosed instantly).

Both help big investors trade efficiently without disrupting market prices.